The Epidemic "Black Swan" Aggravates The Housing Market Turmoil, Housing Companies Accelerate Changes Or "Bend Overtaking".

With the continuous spread of the new crown pneumonia epidemic, the real estate market has seen unprecedented scenes: land supply stop, site closure, sales center closure, new property sales stop. Long term survival mode of operation is being greatly impacted, and many housing enterprises have come to the brink of life and death.

In order to support the steady development of real estate enterprises, as at February 14th, at least 10 provinces and cities in Wuxi, Xi'an, Shanghai, Nanchang, Zhejiang and Nanjing have successively introduced support policies.

Behind the local government's efforts to stabilize the property market is the sudden downfall of the new crowned pneumonia epidemic caused by the "black swan".

At a telephone conference on market situation held in early February, Cao Jingjing, director of marketing research at the middle finger Research Institute, pointed out that compared with the market environment of SARS in 2003, the current macroeconomic situation is different. The current economy is facing greater downward pressure, and the current market scale continues to spiral at historical highs, and the driving force for substantial growth is obviously weakened. In recent years, the real estate policy regulation and control is tightening up. Under the influence of the epidemic, the negative impact of the withdrawal of Housing enterprises' funds is emerging, especially the risk of the operation of high turnover enterprises is more obvious.

The middle finger Research Institute predicted that the area of commercial housing sales in 2020 dropped by 5.0%~6.5% compared with the same period last year. Due to the market impact brought by the epidemic, the year-on-year decline is expected to continue to decline by about 2%. From absolute terms, it will reduce 30 million ~3500 million square meters, which is equivalent to reducing the total market volume of a Wuhan.

So, how will the majority of Housing enterprises respond to the huge market impact brought by the epidemic?

The epidemic has increased the downward pressure on the market.

In fact, before the outbreak of the epidemic, China's real estate industry has stepped into a downward channel under the background of overall slowdown in economic growth.

In 2019, under the pressure of insufficient domestic consumption power and tight foreign environment, GDP growth officially entered the "6" era. In January this year, the first phase of the Sino US agreement was successfully signed, and the market confidence was boosted in the short term. However, at the present stage, the outbreak of new outbreaks will have a greater impact on the catering, tourism and transportation industries. Investment in manufacturing and infrastructure has also been affected. This will further increase the downward pressure on the economy and delay the stabilization of the economy in the near future.

As Zhang Dawei, chief analyst of Zhongyuan Real estate, said, the sales policy of the local sales offices is basically closed and the construction sites are closed down. However, the current policy of real estate basically has only a certain impact on the throttle. For real estate enterprises, the biggest problem is financial pressure, especially the issue of debt maturity. Once sales can not recover quickly, housing enterprises will face general financial pressure by March.

Commercial real estate, residential market passenger flow suddenly reduced, housing enterprises face the pressure of capital flow directly. Short term demand for real estate market, overlay Housing enterprises to increase sales, or will lead to housing prices downward pressure. Compared with the housing market, commercial real estate faces more short-term financial pressure. According to the Ministry of Commerce monitoring, in 2019 Spring Festival holiday (from February 4 to 10, 2019), the national retail and catering enterprises achieved sales of about 10050 billion yuan, 2020 affected by the epidemic, the Spring Festival archives of the retail and catering industry encountered "cold winter".

China business data conservative estimates, during the Spring Festival catering (hit 80%), retail (loss 50%), entertainment and entertainment (near total loss) loss prediction of more than 500 billion yuan, the total loss of the shopping center industry turnover is estimated to reach more than 80%. Hu Fangyuan, President of Ningbo Hengtai business management group, revealed that the profit forecast for the group will be reduced by 33.5% this year, according to the twenty-first Century economic report.

It is noteworthy that, according to public information, the real estate industry in 2020 needed to repay the total amount of bonds 759 billion 800 million, 1-6 in 2019, compared with 2019 is flat, but since the second half of last year, financing continued to tighten, overlay the impact of the epidemic early this year, many private enterprises in housing prices short-term cash flow will be significantly affected, from the current debt cost and debt ratio, it is still a controllable state, but as time goes by, there may be changes.

In addition, the capital market is volatile at present. If the area completed or delivered in the first half or even the whole year falls, it will affect the overall performance, bring pressure on the stock price, and bring challenges to enterprises with large number of equity pledge. Under the background of the epidemic, some high turnover enterprises will also face bigger capital problems.

Through the monitoring of the middle finger land cloud tools, the middle finger Research Institute shows that although the progress of the national high priced projects has obviously accelerated in recent years, the market share is still very low. According to incomplete statistics, up to the end of 2019, only 307 items were opened at the more than 1000 highest prices since 2016, accounting for less than 30% of the 22 key cities in the country. More than 70% of the "land king" project is precipitated in the hands of Housing enterprises, especially after the outbreak, which will create greater pressure on the capital chain of Housing enterprises.

Financial institutions are concerned about the following three types of Housing enterprises operating risks: high priced items in the inventory account for relatively large housing prices; three or four tier cities with more layout of the enterprises, because the epidemic restricts the return home, and in the past, according to the statistics of third party organizations, some cities can return home sales accounted for 25% of the whole year, and the enterprises with more layout in the epidemic area.

Market freeze to speed up the reform of housing prices

Faced with the increasing pressure of survival, many real estate enterprises have also started the road of self rescue.

Reporters interviewed a number of Housing enterprises and commercial real estate operators were informed that the housing enterprises' self-help is mainly reflected in the upstream and downstream industry chain linkage difficulties. For example, the Red Star Kai Lung has taken the initiative to reduce the rent to support the front-end businesses, protect businesses and share risks. It also helps the upstream factories to give more help to channel providers and suppliers.

A comprehensive number of securities analyst perspective, although the market demand for home ownership is still there, but will be postponed. In the provinces and cities with serious epidemic situation, the short-term real estate market adjustment pressure is greater than that of the three or four tier cities.

Large state-owned enterprises and relatively well funded enterprises are more capable of crossing the cycle. In the epidemic, they also quickly adjusted the strategic investment direction in the late stage, such as investing in second tier cities, including cities affected by the epidemic, and more second tier cities with stronger liquidity.

According to the insiders, consumers' attention to public health and health is high. The foundation and conditions for the construction of the first tier, second tier and strong three tier cities will be better and better. The demand for housing will also be tilted to these cities. Therefore, in the medium to long term, enterprises should further strengthen investment in these cities. In the future, housing enterprises should focus on two kinds of products: the first is the healthy products, and the second is the information products. Because of the concern for medical treatment and the attention to information and timely feedback, these two products will surely be favored by customers. In the past, real estate products emphasized the introduction of academic degrees and other resources. After this epidemic, the role of community health care in real estate products will become stronger and stronger in the future. It is suggested that housing enterprises should pay attention to community health care in terms of products and long-term transformation.

The epidemic may also promote higher levers to take the initiative to reduce leverage and pay more attention to capital and marketing. A housing firm told reporters that the company proposed to protect the efficient operation of the capital side in February, as well as the marketing means of the sales side. In the later period, the losses caused by the epidemic were hedged by accelerating construction. From this perspective, many managers recognize the importance of adequate funds.

In view of the shrinking and slowing down of offline transactions, the mode of business operation is also changing gradually. It is expected to accelerate the non-contact trading mode such as online transactions and smart retailing. At the same time, community business and the last mile to home service are also facing new opportunities for development. In addition, the epidemic situation will also promote the commercial operation enterprises to enhance the construction of the commercial real estate big data and the application ability based on the data level.

Housing enterprises are facing adjustment in investment, marketing, financing and so on. A person in charge of housing prices in Nanjing, who was interviewed in the twenty-first Century economic report, said he was cautious about the market outlook. He pointed out that most of the online sales of most projects were in a zero turnover state. "If the online sale is a limited price, a second-hand price difference larger property, these items are profitable for consumers, then there will be a deal. Otherwise, the online sale effect is very weak, but there is no better way at present." In addition, at the present stage, community services and property management will increasingly affect the brand of enterprises, and will also become an important direction for the future development of the industry.

It is worth mentioning that some enterprises between 10 billion and 30 billion in this round, because of the opportunity to get some reasonable price of land, or there is a chance to overtake corners.