Epidemic Hit The Property Market: Many Zero Turnover In February, Part Of The Housing Sector Wage Cuts

Affected by the new crown pneumonia epidemic, the real estate market ushered in the "worst start" in recent years.

In March 16th, the National Bureau of statistics released data showing that in 2020 1-2, the total area of commercial housing sales in China was 84 million 750 thousand square meters, down 39.9% from the same period last year. Among them, the residential sales area decreased by 39.2%. Commercial housing sales of 820 billion 300 million yuan, down 35.9% over the same period last year. Residential sales fell by 34.7%.

This is the first time since April 2015 that the total sales area and sales volume of the national commercial housing (cumulative) has dropped. In addition, other related data growth also appeared "cliff type" decline.

Considering the outbreak of the epidemic, this change is not surprising. The mainstream view is that with the resumption of work and the rhythm of life is gradually restored to normal, the demand for housing will gradually be on the agenda, and the market is expected to return to its normal level in the two quarter.

But for some housing companies, the short-term liquidity constraints are bringing a series of chain reactions. Recently, some housing enterprises have been defaulting on their debts, and many other companies have responded by reducing salaries and layoffs.

Multiple indicators "cliff type" slide

A sharp decline in volume will have a certain impact on the trend of housing prices. National Bureau of statistics data show that in February this year, 70 large and medium cities housing prices rose steadily. Among them, the price of new houses in the first tier cities is flat, and the price increases in second tier cities and three tier cities are 0.1%, narrowing than in January.

"The sudden outbreak of new crown pneumonia has a significant impact on the real estate market, and all localities and departments have resolutely implemented the Party Central Committee's decision making plan for coordinating epidemic prevention and control and economic and social development, and issued a series of policy measures in a timely manner to ensure the sustained and stable development of the real estate market." Kong Peng, chief statistician of the city Bureau of the National Bureau of statistics, reads this way.

It is worth noting that in the 70 large and medium-sized cities that were counted, there were no new businesses in 19 cities in February, and there was no transaction of second-hand housing in 24 cities. Some analysts believe that this ratio can see the situation of the national market, and it is estimated that about 1/4-1/3 of the cities failed to realize transactions in February.

In addition to sales, real estate enterprises' investment, financing and land use have also slowed down. Many indicators have fallen off the cliff type, and the growth of investment, capital sources and other data has increased to a lower level.

1-2 months of this year, the national real estate development investment of 10115 billion yuan, a year-on-year decline of 16.3%. Over the same period, the new construction area and completion area decreased by 44.9% and 22.9% respectively.

In 1-2 months, the land acquisition area of the national real estate development enterprises was 10 million 920 thousand square meters, down 29.3% compared with the same period last year, and the land transaction price was 44 billion yuan, down 36.2%.

In terms of financing, the real estate development enterprises in the first two months of the year reached 20210 billion yuan, down 17.5% from the same period last year. Among them, the sales decline, the deposit and pre paid decline of 23.9%.

In response to the impact of the epidemic, many cities have fine-tuning the property market policies in recent years, such as extending the payment time for land leasing, delaying repayment of provident fund loans, deferring taxes and fees, and increasing land supply. However, there are also some cities' policy of "supporting the market" because they are too "radical" and will soon recover, thus causing the phenomenon of "one day tour" of loosening the property market policy.

In response, Mao Shengyong, a spokesman for the National Bureau of statistics, reiterated in March 16th that "housing is not speculation," and said that "in accordance with the requirements of promoting high-quality development, the real estate is not a short-term stimulus policy, which is also clear."

Most practitioners believe that this statement also means that despite the serious impact of the epidemic, the market regulation policy will not be substantially relaxed.

Debt default occurs

Recently, with the gradual weakening of the epidemic situation, the pace of resumption and resumption of production has begun to accelerate, and the real estate market is gradually warming up. Statistics of institutional statistics show that since March, the scale of weekly transactions in various real estate markets has been increasing.

Xu Xiaole, chief market analyst at Shell Research Institute, pointed out to the twenty-first Century economic report that in the past two weeks, the volume of second-hand housing in chain cities in 18 cities has increased by 89.7% and 64% respectively. The number of new listings has recovered to around 60% of the same period last year, and the new source of tourists (mainly from the online) has exceeded the level of the same period last year.

He believes that the impact of the epidemic on the real estate market is short-term. The demand for early accumulation is relatively strong. With the recovery of offline activities, the volume of trading is expected to increase in the future.

58 Zhang Bo, the dean of Anju Real Estate Research Institute, also believes that the market is expected to return to its normal level in the two quarter. Among them, with a large number of site rehabilitation, construction will gradually return to normal level in March. However, due to large inventory, housing enterprises to take the enthusiasm of the recovery is still need time.

But the short-term impact of the epidemic still can not be ignored.

In March 6th, the Shanghai clearing house revealed that the first term medium-term note payable by new Hualian holding company in 2015 could not be paid in full and on time, which constituted a substantial breach. "Real estate + Wen brigade" is the main business of new Hualian holdings.

In March 9th, CITIC Guoan group announced that due to tight liquidity, the company failed to raise funds in full in accordance with the agreed time. "16 CITIC Guoan MTN001" has constituted a substantive breach.

The emergence of these two cases of default is due to poor operation and tight funds, but the outbreak of the new crown pneumonia is undoubtedly an important fuse. The documents disclosed by the Shanghai clearing house point out that the new coronavirus pneumonia has been seriously affected by the force majeure factors. New Hualian holdings have suffered heavy losses in cultural tourism, commercial retail, scenic spots, hotels, restaurants, oil trade and so on. In the 1-2 month, the amount of business reimbursement was reduced by more than 6 billion yuan.

A housing firm in Beijing told the twenty-first Century economic report that financing is difficult both inside and outside the country. If the market recovers slowly, it will not rule out the continued default of debt.

Pay cuts and layoffs are also happening. In twenty-first Century, the economic report learned that in order to cope with the impact of the new crown epidemic, many housing enterprises controlled the operation cost through the way of reducing wages. The scope of the pay reduction was mainly confined to the top management. A 20 strong housing company has launched a broad range of layoffs in recent years, including sales, operations and planning. Some small and medium-sized Housing enterprises also have layoffs.

The former housing companies said that although many housing enterprises have resumed work, but in the "sales oriented" real estate industry, the resumption of market transactions still determines the capital chain of enterprises. He believes that in this wave of epidemic situation, no housing enterprises can "whole body retreat". Some small housing enterprises will be accelerated to eliminate, and large and medium-sized Housing enterprises will also face the first quarter and first half performance decline.

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