The Investment Enthusiasm Of Real Estate Enterprises Keeps On Increasing, And The Land Sales In 11 Cities Will Exceed 100 Billion Yuan This Year

Despite the influence of epidemic situation, regulation and many other factors, the investment enthusiasm of real estate enterprises remains unchanged.

According to data from Zhongyuan Real estate, as of December 7, land sales in 50 major cities this year reached 3.75 trillion yuan, up 20.7% year on year. Among them, land transfer fees in 11 cities exceeded 100 billion yuan, while those in Shanghai, Hangzhou and Guangzhou exceeded 200 billion yuan.

The booming land transactions usually reflect the high investment enthusiasm of real estate enterprises. After a trough in the first quarter of this year due to the impact of the epidemic, land transactions resumed rapidly from the second quarter. In recent two months, despite the influence of the "three red lines" and other policies, the enthusiasm of enterprises for land acquisition has not decreased.

From the perspective of regional distribution, the focus of land acquisition of real estate enterprises is more inclined to the first and second tier cities, which not only reflects the steady trend of enterprise investment, but also makes the unit price of land transaction significantly increased this year.

But for this year's land transaction, some people in the industry call it "the last chance". With the "three red lines" policy gradually pushed forward, the financing scale of real estate enterprises will inevitably be affected in the future, and their performance in the land market will be more cautious.

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The first and second line is the "main battlefield"

The land market in 2020 can be roughly divided into three stages.

The emergence of the new crown epidemic once affected land transactions. Therefore, in the first quarter of this year, many cities launched rationalization policies, such as delaying the payment of land transfer fees, so as to stabilize the land market and maintain the investment confidence of real estate enterprises.

Since the second quarter, land transactions have gradually warmed up. In the past few years, due to a large number of Housing enterprises' inventory, and the rapid recovery of the market.

At the end of August, the prudent management policy of real estate financing represented by the "three red lines" was proposed to carry out hierarchical and quantitative management on the financing of real estate enterprises. Before the "boots" landing, real estate enterprises have accelerated the pace of financing, and the pace of land acquisition is also significantly accelerated.

Zhongyuan Real Estate pointed out that as of December 7, land transfer fees of 30 cities had exceeded 50 billion yuan this year, significantly higher than the same period in history.

In the list of land transactions, Shanghai ranked first with 277.3 billion land transfer fees, up 57% year-on-year. The land transfer fees in Hangzhou and Guangzhou reached 256.4 billion yuan and 224.9 billion yuan respectively. Nanjing, Beijing, Wuhan, Ningbo, Foshan, Suzhou, Chengdu, Chongqing and other cities paid more than 100 billion yuan of land transfer fees.

Among the 11 "100 billion cities", except for Wuhan and Suzhou, the scale of land transfer fees in other cities is higher than that in the same period last year.

The first and second tier cities have always been the key areas for real estate enterprises to acquire land, especially this year. According to the statistics of 20 real estate enterprises by China Index Research Institute, among the newly added land reserves from January to November this year, the land acquisition amount of real estate enterprises in first tier cities accounted for 19.4%, nearly 4.1 percentage points higher than that in 2019.

This not only increases the average land cost of real estate enterprises, but also makes the land market of hot cities present a more intense competitive situation.

According to the data of the above-mentioned institutions, from January to November this year, 20 representative enterprises acquired 270 million square meters of land, a year-on-year decrease of 8.7%; however, the accumulated land acquisition amount was 1.6 trillion yuan, with a year-on-year increase of 8.6%.

In December, the situation remains unchanged. On December 8, among the two land transactions in Beilun, Ningbo, 192 and 233 rounds of bidding were completed respectively, and a homestead in Huzhou was completed after 279 rounds of bidding. On the same day, a homestead in Wuhan Optical Valley area sold a floor price of 15778 yuan / m2, becoming the new unit price "land king" of Guanggu East.

The influence of the "three red lines" is gradually emerging

There are many reasons that the enthusiasm of real estate enterprises to invest abroad is not decreasing. Among them, in addition to maintaining the scale of the supply side, financing and sales are considered to be the two most influential indicators of investment enthusiasm.

According to the statistics of Shell Research Institute, from January to November 2020, domestic and foreign bond financing of real estate enterprises accumulated about 1129.1 billion yuan, a slight increase of 0.8% year-on-year. In view of this year's "overseas bond market downturn, domestic financing tightening" financing environment, this scale is still not small.

Smooth financing channels enable enterprises to obtain land capital. Among them, since the second quarter of this year, the financing cost of real estate enterprises has been as low as 4% - 5%, significantly lower than that of 6% - 8% in the same period last year. Before the official promotion of the "three red lines" policy, many real estate enterprises have reserved enough funds.

In addition, a person in charge of a listed real estate enterprise in Beijing told the 21st century economic report that the company's land acquisition expenditure is usually linked to the sales scale. When sales maintain growth, land acquisition expenditure will not decline.

According to the China Index Research Institute, in the first 11 months of this year, the land acquisition amount of 20 representative real estate enterprises accounted for 29.7% of the sales amount in the same period, which was up from the same period in 2019.

Many institutions predict that the land acquisition expenditure of real estate enterprises will remain at a high level in 2020. The first and second line as the center of gravity, high unit price, fierce competition is still an important performance of the land market.

However, the above-mentioned real estate enterprises also pointed out that with the gradual implementation of the "three red lines" policy, it will be very difficult for the situation of "lavish thousands of gold" in the land market. It is expected that the land market will gradually stabilize from next year.

On the one hand, the quantitative management of financing scale will make the real estate enterprises more cautious in the land market; on the other hand, with the high land price, more and more real estate enterprises tend to acquire land by means of merger and acquisition.

In fact, in the last two years, the area of land transactions in the open market has been on a downward trend. According to the data of the National Bureau of statistics, in 2019, the land purchase area of real estate development enterprises was 258.22 million square meters, a year-on-year decrease of 11.4%. From January to October this year, the land purchase area of real estate enterprises was 177.75 million square meters, a year-on-year decrease of 3.3%, an increase of 0.4 percentage points compared with January September.