August Property Market AB Side: Sales Surge Regulation Tightened, A New Round Of Promotion Wave Brewing

Under the epidemic situation, real estate performance exceeded expectations.

In August and the first eight months, the sales of mainstream real estate enterprises recovered rapidly, which has reached or exceeded the level of the same period last year. In some cities and regions, house prices rose significantly.

At the same time, since August, the regulation and control policies of the property market have been tightened again, including the increase of restrictions on purchase in some cities and the establishment of "three red lines" for financing, which have made developers and the market feel the coolness from the policy.

Summer has passed, autumn has arrived. The traditional gold nine silver ten of the real estate market has also come, "three red lines" top, rigid index constraints to form a deterrent to real estate enterprises. In order to reduce the debt, most real estate enterprises must step up sales to offset performance and recover funds. Evergrande, rongchuang, Fuli and other developers with high capital pressure will launch a round of price reduction promotion.

Worries under the recovery Market

August, the midsummer. The sales volume of Linxi County of Hengda in Zhengzhou reached nearly 200 million yuan in the first half of the month, continuing to take the lead in the red plate of Zhengzhou net.

It's not just Zhengzhou. Shenzhen, Guangzhou, Shanghai and other places, the new housing market has appeared local hot, Shenzhen several new market as soon as sold out.

The transaction area of the property market in key cities continued to rise. In August, the total transaction area of 30 key monitoring cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Jinan, increased by 22% year-on-year and 5% month on month.

In August, the transaction area of the four first tier cities increased by 39% year-on-year and 16% month on month. The year-on-year growth rates of Beijing, Shanghai and Guangzhou were more than 30%, and that of Shenzhen was 56% higher than that of the same period last year, and the transaction volume in one month reached a new high in the year.

Housing prices in 100 cities have also risen in general. In August, the average price of new houses in Baicheng was 15605 yuan / m2, up 3.34% year-on-year and 0.50% month on month; the average price of second-hand houses in Baicheng was 15331 yuan / m2, up 2.00% year-on-year and 0.18% month on month.

Following the pace of the market, the sales performance of leading real estate enterprises in August also ushered in a new round of growth.

According to Kerui data, in August 2020, the top 100 real estate enterprises achieved a full range of sales of 1117.47 billion yuan, up 29.2% year-on-year and 2.8% month on month. Among them, nearly 80% achieved year-on-year performance improvement in a single month.

It is worth noting that the head of the real estate enterprises have prominent advantages and the performance growth is fast. In August, among the top ten real estate enterprises, except Greenland, which fell by 33.1% year on year, the other nine real estate enterprises achieved year-on-year growth in full caliber sales and their performance continued to rise.

Among them, the growth rate of China Merchants Shekou was the largest, with a year-on-year increase of 48.2% in August. Shimao, poly, Vanke and country garden were in the second tier of growth, with an increase of 32.8% - 37.3%. China Resources Land and rongchuang followed closely, with an increase of 24.8% and 24.1% respectively. The performance growth of CNOOC and Evergrande was moderate, with growth rates of 12.5% and 6.6% respectively.

However, from the first half of the data, affected by the epidemic, most of the real estate enterprises recorded a year-on-year decline in sales in the first half of the year, or the growth rate slowed down, making it more difficult to achieve the annual sales target.

Greater worries and uncertainties come from policies. Behind the booming sales market in August, the hand of regulation has been waving.

At the end of August, Wuxi issued a new regulation and control policy, starting from the strict speculation of school district housing, the down payment of no less than 60% for the second set of housing to avoid overheating of the property market. Prior to this, more than 10 cities, including Shenzhen, Dongguan, Hangzhou and Ningbo, have introduced tightening policies in July and August.

The biggest impact on real estate enterprises is the new financing rules. On August 20, the Ministry of housing and urban rural development and the central bank convened 12 real estate enterprises, including Vanke, Evergrande, Biguiyuan and Zhonghai, to hold a forum to study the fund monitoring and financing management rules of key real estate enterprises. It is said that the new rules are the "three red lines".

Zhang Dawei, chief analyst of Zhongyuan Real estate, said that the first half of 2020, when the real estate regulation was relatively loose, was inevitable, and the trend of tightening the property market in many places has appeared. It is expected that more than 30 cities will issue tightening policies in September, so it is difficult for house prices to rise sharply.

On the one hand, the current market is warm, and on the other is the tightening policy of the cold property market. Under such a mixed environment, developers are heading for the sales battlefield in the next four months.

The fourth quarter will accelerate the de melting

In the past mid-term performance meeting, most developers have clearly understood that "housing does not stir fry" must adhere to, and all enterprise strategies and actions should be designed and implemented based on this.

Under the tightening policy and financing, the traditional "gold nine silver ten" may be the biggest sales window this year, and will become the key play for real estate enterprises to win the decisive victory in 2020.

Zhang Dawei believes that the biggest risk in 2020 will still be repeated outbreaks. Therefore, for most developers, they should pay more attention to the market entry cycle and focus on September to October to avoid year-end rush.

Founder Securities Research Institute said that under the continuous fermentation of the "three red lines" financing new rules, the next business focus of real estate enterprises will be on deleveraging, improving financing costs, reasonably controlling the ratio of land to goods, strengthening cash flow management and promoting sales collection.

Ding Zuyu, CEO of E-House enterprise group, also reminded that for the real estate enterprises temporarily designated as red file and orange file, they should actively grasp the current sales window period, step up supply, active marketing, and rush to collect performance, so as to increase sales revenue and improve the balance sheet.

Take Evergrande as an example. Although the sales volume in the first eight months has reached 56.27% of the annual target, Evergrande has recently launched a new round of marketing activities to stimulate sales, offering 8.3% off for residential buildings and free of property fees for three years.

"Every day is a good day to sell." The president of Wanke also said that Wanke would continue to increase the pace of sales of four seasons, and Wanke would still adhere to the strategy of fast sales.

Jiazhaoye, which has set a target of 100 billion yuan this year, will also speed up the supply of goods in the second half of the year. According to the management, "in the second half of the year, the total saleable resources are 120 billion yuan, and the saleable area is 6.6 million square meters. The goal can be achieved by maintaining the normal distribution."

Shell Research Institute predicts that the "golden nine silver ten" will come as promised, and the sales of real estate enterprises in these two months may be further improved.

Guosheng Securities believes that real estate sales are expected to continue the repair trend in the first half of the year, but subject to tightening policy and other factors, the overall sales growth rate of real estate enterprises may gradually slow down in the next four months.

In fact, affected by the epidemic situation in the first half of the year, the pace of supply slowed down, and the overall performance of various real estate enterprises was greatly impacted. With the recovery of the market, sales increased, but as everyone concentrated on pushing goods in the second half of the year, it means that the market competition will be very fierce, and a new round of price reduction promotion can not be ruled out.

For example, Evergrande's internal goal this year is to sprint sales of 800 billion yuan, so more goods are arranged in the second half of the year. According to management, about 90 million square meters of saleable goods will be launched into the market in the second half of the year.

Zhang Yadong, chairman of the board of directors of Greentown China, also disclosed that there were more than 270 billion yuan worth of goods in the second half of the year. According to the conversion rate of nearly 70%, there was about 190 billion yuan of contract sales amount.

At the same time, Founder Securities suggests that in order to deal with the "three red lines", from the aspect of financing, real estate enterprises should actively expand supply chain finance, ABS, project equity financing, and enhance the discourse power of upstream and downstream; flexible use of non real estate business carrier financing within the enterprise system, reduce the occupation of working capital, reduce prepayment and accounts receivable, and increase the non cash payment ratio Heavy.

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