The real estate market continues to divide, and the debt of real estate developers is overwhelming. The future is not optimistic. (Image source: Fotolia)
[See China December 25th, 2021](See a comprehensive report by Chinese reporter Li Zhengxin) December 25th,Bank of ChinaRelease the fourth quarterMonetary PolicyThe content of the regular meeting, which mentioned meeting the needs of buyers. but,Property marketContinuous differentiation,real estateDeveloperdebtOverwhelming, the future is not optimistic.
According to a press release issued on the official website of the People’s Bank of China, the Monetary Policy Committee of the People’s Bank of China held a regular meeting of the fourth quarter of 2021 on the 24th.
In terms of monetary policy, the more prominent change is that the meeting emphasized the structural role of monetary policy. It is worth noting that this regular meeting has changed the expression of the current internal and external environment facing China’s economic development. Compared with the regular meeting of the third quarter, the expression of the external environment is “complex and severe” while adding “uncertainty”. The expression of the domestic economic development is “faced with the triple pressure of demand contraction, supply shock, and weakening expectations.”
At the Central Economic Work Conference that ended not long ago, Xi Jinping’s authorities sent a clear signal. The meeting concluded that China’s economy is facing triple pressures of shrinking demand, supply shocks, and weakening expectations.
The Central Economic Work Conference mentioned the word “stable” 25 times. According to He Keng, who served as the vice chairman of the Finance and Economics Committee of the National People’s Congress, he emphasized that “stability” is due to instability, and the general source of instability is financial instability. Stability is also the main minefield. The main fuse that detonated the instability may be the bursting of the real estate bubble, so the meeting continued to emphasize the positioning of “housing, not speculation”.
In addition, this regular meeting of the People’s Bank of China proposed to safeguard the legitimate rights and interests of housing consumers, better meet the reasonable housing needs of buyers, and promote the healthy development and virtuous circle of the real estate market.
Compared with the regular meeting of the third quarter, this regular meeting added “to better meet the reasonable housing needs of buyers” in the real estate statement.
From the official financial data, in the past two months, the financing scale of real estate companies is gradually increasing. In November, the real estate financing of financial institutions continued to “double up” month-on-month and year-on-year. On the basis of the sharp increase in October, real estate loans in November continued to maintain a momentum of double growth month-on-month and year-on-year. Since November, many real estate companies have registered to issue debt financing in the inter-bank market, and the scale of financing has increased substantially compared with October.
The China Banking and Insurance Regulatory Commission also stated that it will guide bancassurance institutions to provide financial services to the real estate and construction industries for real estate development loans and housing mortgage loans.
Although the government intends to “release water” to the property market, the differentiation of the property market in various regions has become more prominent.
For example, on December 23, the “Notice on Canceling the Plan for Public Recruitment of Grassroots Government Staff” published on the website of Hegang City Government in Heilongjiang Province showed that due to major changes in the financial situation of the Hegang City Government, it was decided to cancel the public recruitment of grassroots government work. Personnel plan.
Hegang City is a typical resource-based city. It was once one of the four largest coal mines in China and an important producer of high-quality thermal coal and chemical coal.
In 2011, Hegang City was identified by the state as one of the third batch of 25 resource-exhausted cities. After the depletion of resources and the shrinking of industries, the population has continued to flow out, and the original housing stock has been large, so housing prices in Hegang have become cheaper.
In 2019, Hegang City has become the focus of attention from all walks of life. The average price of housing in the city in March 2019 was 1,240 yuan/square meter, of which only 300 yuan (RMB, the same below)/square meter around the Jiuzhou built community, and only 150,000 yuan for a 320-square-meter duplex high-rise building.
In the case of high housing prices in large cities such as Beijing and Shanghai, the downturn in housing prices in many cities like Hegang is in sharp contrast.
In addition, research institutions report that Chinese real estate developers and their construction partners will still face an increasingly serious debt crisis in the coming months. In particular, the self-rescue ability of some Chinese private housing companies is worrying. In extreme cases, about 50% of the stocks are still unable to pay their debts.
On December 22, Nomura Securities released a report stating that China’s real estate industry is still the key to a rebound in economic growth. Although the government has made efforts to ease the tension in the developer’s capital chain, it is expected that real estate developers and their construction partners will still face increasingly serious financial challenges in the coming months.
The report pointed out that the challenges mainly come from three aspects: one is that the above-mentioned companies may need to pay a total of 1.1 trillion yuan in arrears of wages to migrant workers and construction workers before the Chinese New Year (January 31, 2022); the second is that local governments have been Restrict the use of pre-sale funds held by developers in bank accounts; third, the maturity of offshore dollar bonds of real estate companies in the first and second quarters of 2022 will almost double that of the fourth quarter of this year. Real estate developers focusing on small and medium-sized cities will face particular difficulties as their new home sales have halved compared to a year ago.
The international credit rating agency Standard & Poor’s recently issued a report that the Chinese real estate industry as a whole is capable of self-rescue, but the room for fault tolerance is small, and the self-rescue ability of some private housing companies is worrying.
It is estimated that the total rigid liabilities of the entire Chinese real estate industry are about 24 trillion yuan, and the annual controllable cash inflow of the entire industry through sales is about 8 trillion yuan; the net cash flow generated by the sales of the entire industry will repay all debts in the cycle About three years. Only 30% of real estate companies can cope with short-term debt repayment pressure, and half of the sample companies may not be able to cope with short-term debt repayment pressure.
Editor in charge: Xin He Source: Look at China
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