Affected by the COVID-19 epidemic, the development of many industries across the country has been affected to a certain extent. The real estate industry is also facing revenue pressure brought about by delayed resumption of work and a sudden drop in sales transactions. At the same time, the peak period of debt repayment is approaching, and the capital chain of real estate companies is further under pressure. On the basis of ensuring "resolute completion of various goals and tasks for economic and social development this year", coupled with the loosening of real estate policies in more than 10 provinces and cities, everyone has returned to the question of whether it will "stimulate the property market and stimulate the economy."
Affected by the epidemic, the cash flow of real estate companies is under pressure
“The debt repayment peak will be around 2020, and it coincides with the epidemic. Sales receivables have suddenly decreased, and there is definitely financial pressure. It is a big test. We are currently trying to alleviate the pressure through expenditure reduction and financing,” said a person from one of the top 30 real estate companies.
Data from the China Index Research Institute show that the total repayment scale of real estate corporate bonds (including overseas debt) in 2020 was 749.39 billion yuan, and the repayment scale in 2021 will exceed one trillion yuan to 1,049.62 billion yuan (the scale of corporate bonds reached 443.88 billion yuan) yuan, the scale of overseas debt reached 317.43 billion yuan), and the industry's repayment scale will begin to decline in 2022, but it will still be as high as 735 billion yuan.
The combined reduction in sales receivables caused by the epidemic has further intensified the financial pressure on real estate companies.
Some developers said that for real estate companies, the original Spring Festival stalls were basically "scrapped" due to the epidemic. For companies, one of the short-term impacts is cash flow, and the suspension of sales has caused a funding gap. For real estate companies that are strapped for cash, the pressure will be even greater. In addition, the current resumption time of the construction site is unclear, the project cannot be resumed, the offline sales office is closed and the online sales center is used to attract customers, and the business rhythm is difficult to arrange. However, the aforementioned people pointed out that although the real estate market has been affected to a certain extent by the spread of the epidemic, overall the demand is still there and the time to buy a house will be postponed.
But this also brings challenges to some high-turnover companies. China Index Research Institute believes that after the outbreak of the epidemic, the short-term liquidity problem of real estate companies has attracted much attention, especially for some high-turnover companies. Their traditional operations of "quickly acquiring land, starting construction, opening quickly, and selling off funds quickly" have been hindered, which has affected funds. The elasticity of the chain will bring tests, and it is necessary to focus on the duration of the epidemic, adjust and optimize project assets, and manage the capital cycle well.
Policies have been introduced to mainly support real estate companies
There has not yet been a new policy to "stimulate the property market"
It can be seen that while the epidemic continues, there have been Many cities have introduced new policies to support companies in coping with the epidemic.
“We haven’t seen any ‘dry goods’ yet. Most of them focus on easing the cash flow of real estate companies. The main purpose is to reduce the pressure on real estate companies, but there are no stimulus policies on the demand side.” The aforementioned person from a TOP30 real estate company said.
According to incomplete statistics, so far, Wuxi, Xiamen, Hengyang, Fuzhou and other places have successively introduced policies to support the stable and healthy development of the real estate market. In addition, Jinan, Xi'an, Hangzhou, Shanghai, Tianjin, Nanchang, Nanjing, Zhejiang and other provinces and cities have introduced new land policies to respond to the epidemic, and some cities have clarified that land payments can be extended or paid in installments.
Among them, Fuzhou City issued the "Measures to Effectively Respond to the Epidemic and Promote the Stable Development of Urban Development and Construction". The 10 measures not only postpone the payment deadline of land transfer fees, but also clearly increase credit support and reduce corporate financing costs. Extend or renew loans to companies that have difficulty repaying loans.
The Housing and Urban-Rural Development Bureau of Hengyang City, Hunan Province issued the "Several Policies on Promoting the Stable and Healthy Development of the Real Estate Market (Trial)" on February 14, implementing house purchase subsidies and expanding the scope of housing purchase subsidies for talents; Reduce the cost of using land funds for development companies; allow for the completion of relevant approval procedures.
On the same day, Xiamen City, Fujian Province issued the "Several Work Requirements on Actively Responding to the New Coronavirus Pneumonia Epidemic and Promoting the Healthy Development of the Real Estate Market". It is proposed to promote the healthy development of Xiamen's real estate market in nine aspects, including increasing financial support for real estate development companies, ensuring the timely disbursement of provident fund loans to home buyers, and providing appropriate rent reductions and exemptions for long-term rental apartments.
Guangdong Provincial Housing Policy Research Center. Chief researcher Li Yujia said that at present, we have entered a stage of focusing on epidemic prevention and control with one hand and development on the other. While studying and deploying epidemic prevention and control work, we have also made it clear and resolute in completing various goals and tasks for economic and social development this year for the real estate industry. In other words, the policies currently introduced mainly adopt supportive policies for enterprises and residents who have been greatly affected by the epidemic.
Such as the start of construction, completion, house delivery, land transfer fee payment, reduction of financing costs for real estate companies, etc. At present, the substantive impact of the epidemic on individual home buyers has not yet appeared, and the demand-side "rescue" policy has not yet been introduced. Whether it will be released in the future remains to be seen.
"In terms of purchase and price restrictions, under the tone of city-specific policies, each local government can make their own decisions in the future. Under the general tone of housing for living, not speculation, the real estate market's 'three stability' ( Stable land prices, house prices, and expectations), implement one city, one policy, and implement the main responsibilities of local governments," Li Yujia said.
Will policies be introduced to stimulate the property market?
On the basis of ensuring "resolute completion of various goals and tasks for economic and social development this year", coupled with the loosening of real estate policies in more than 10 provinces and cities, everyone has returned to the question of whether it will "stimulate the property market and stimulate the economy" .
“Currently, the policies introduced by various places are mainly to alleviate the cash flow pressure of real estate companies, mainly to support enterprises. There has not been a serious 'rescue policy' issued, but I think that relaxing purchase restrictions, sales restrictions, and lowering mortgage interest rates We can look forward to it. The main thing is to focus on one city, one policy, and it is more difficult to relax purchase restrictions and loan restrictions in first-tier or key second-tier cities." A developer pointed out.
Zhang Hongwei, chief analyst of Tongce Research Institute, believes that "more cities will definitely introduce targeted easing measures to stabilize the property market. The current pneumonia epidemic continues. In the short term, 2~4 Every month will be affected by the epidemic. The epidemic has a greater impact on the transaction volume and online signing registration volume of the real estate market. Therefore, local governments will introduce some targeted measures to enable the transaction volume of the entire real estate market to be quickly recovered and started. ” p>
“With sales setbacks and greater pressure on corporate capital chains, some companies have also begun to use price reductions and promotions to speed up payment collections to solve problems such as operating cash flow. In terms of volume and price, I think the second quarter and third quarter will be affected by Cities that have been severely affected by the epidemic will see a restorative increase in transaction volume on the basis of price-for-volume transactions," Zhang Hongwei said.
However, industry insiders interviewed generally believe that after the epidemic, transaction volume will stabilize and recover. However, under the tone of "living in, not speculation" and the "three stability" policy, house prices are less likely to rebound significantly.
China Index Research Institute believes that under the influence of the epidemic, the financial environment will be more positive for real estate companies. In early February, the central bank released positive monetary signals, and five departments including the People's Bank of China issued the "Notice on Further Strengthening Financial Support to Prevent and Control the New Coronavirus Infection Pneumonia Epidemic", which has been beneficial to the capital allocation of the real estate industry to a certain extent, and the financing window is opening. In addition, on February 3rd and 4th, the People's Bank of China injected a total of 1.7 trillion in liquidity for two consecutive days to stabilize market expectations and boost market confidence, allowing all walks of life, including real estate companies, to see the opportunity to expand "financing" hope.
Ni Pengfei, director of the Urban and Competitiveness Research Center of the Chinese Academy of Social Sciences, pointed out in an interview with China News Service that real estate has already had a certain restrictive effect on the healthy development of the economy.
This is reflected in the fact that the net contribution of real estate to economic growth has turned from positive to negative, high housing prices have "crowded out" the consumption and livelihood of the entire household sector, and excessive real estate development has led to an imbalance in the economic structure and It has affected the economic structural adjustment and industrial upgrading, and real estate risk is an important source of risk for the Chinese economy.
Ni Pengfei believes that the real estate regulation in the past two years has just achieved initial results. If stimulus policies are implemented for real estate, not only will it not be able to hedge against the economic downturn, it will also worsen the above problems.