The third batch of centralized land supply is underway.
On Nov. 3, the Hangzhou Municipal Bureau of Planning and Natural Resources released a preview of the third batch of centralized land supply, proposing to launch 51 land plots. One obvious change is that there are significantly more land plots in Hangzhou's main urban areas.
This is a very important signal. Overall, the country's second batch of centralized land supply is cold, withdrawal of the abortive auction and other phenomena increased. Industry experts expect that the country's third batch of centralized land supply may be optimized in a number of aspects, such as lowering the margin ratio, increasing the land for rental housing, and reducing bundling restrictions.
Withdrawal and abortive auction rate from 6.5% to 31.8%
The second batch of centralized land supply is obviously cold. According to the statistics of China Index Research Institute, as of October 21, 20 cities including Beijing, Shanghai and Hangzhou have completed the second batch of concentrated land offering, of which 17 cities (Changchun, Xiamen and Wuxi have completed the second batch of bidding before August) responded to the requirements of the Ministry of Natural Resources to optimize the rules of the land auction, strict review of the land purchase of their own funds, etc., and the market cooled down significantly.
More than half of the cities' residential land sales floor prices have declined compared with the first batch, and the proportion of plots with bidding up to the upper limit has dropped significantly in most cities. In addition, the second batch of land supply in 20 cities*** counted 70 lots in abortive auctions and 195 lots withdrawn from licensing, with the overall abortive auction withdrawal rate reaching 31.8% (6.5% in the first batch).
Chinese Index Research Institute index business unit research deputy director Chen Wenjing said to the "Daily Economic News" reporter: "On the one hand, the year's key cities policy regulation continues to normalize the third quarter of the real estate policy regulation is frequent, involving restrictions on purchases, sales and second-hand housing transactions reference price, etc., superimposed on the bank's mortgage quota tightened, the market sentiment of wait-and-see rose, most cities Market activity declined significantly under the increased pressure of adjustment, and real estate enterprises' land acquisition expectations declined. On the other hand, the central government continues to improve the prudent management of real estate finance, real estate enterprises continue to be under pressure on the capital side, the bank mortgage quota is tight under the prolongation of the lending cycle, affecting the pace of real estate enterprises back to the individual corporate defaults are also to a certain extent affecting the real estate enterprises of the normal financing, superimposed on the second batch of land supply strict land purchase of their own funds review, etc., the real estate enterprises willingness to take land is inhibited."
The financing environment for real estate companies has still not improved.
According to Shell Research Institute statistics, the cumulative domestic and overseas bond financing of real estate enterprises from January to October 2021 totaled about 799.3 billion yuan, down 24% from the same period in 2020, with the amount of the scale reduced by 246.3 billion yuan. The cumulative decline in the first 10 months of the first three quarters of this year progressively increased, the scale of bond issuance in January-October 2021 accounted for about 66% of the 2020 full year.
From the single month of October 2021, the situation is similar. There were 31 domestic and overseas bond financing*** issuances, 31 fewer than in the previous month, with an issuance scale equivalent to about RMB30.4 billion, a decrease of 55.9% sequentially and 56.1% year-on-year.6 The number of bond issuances fell to single digits for the second time in a year with six bond issuances in October for offshore financing***; and the scale of issuance of financing was about RMB10.1 billion, a decrease of 63.3% sequentially and 69.6% year-on-year.9 Oct. Domestic bonds*** were issued in 25 cases, with an issue size of approximately RMB20.3 billion, down 51.1% sequentially and 43.6% year-on-year.
Small and medium-sized plots of land may increase the supply
Overall, key cities in the optimization of the third batch of plots of land for sale conditions still need to focus on the goal of "stabilizing land prices, stabilizing housing prices, stabilizing expectations", refine and improve the rules of the land auction for the supply of land, the implementation of the city-specific policy, drawing on the implementation of the "one-place-one-policy". A place a policy".
Chen Wenjing said: "Reasonable adjustments to the volume size of the plot, the initial price, bundling restrictions, pilot rules and other transfer conditions, to a certain extent, to protect the profit space of real estate enterprises, and gradually guide real estate enterprises to improve product quality. Specifically, the third batch of land supply in key cities or will make optimization in three aspects such as security deposit, leasing land, and reducing bundling restrictions."
Chen Wenjing introduced, key cities land purchase capital regulation is hardly relaxation, part of the city margin ratio or will be marginal improvement, small and medium-sized plots of land to increase the supply. It is expected to reduce the threshold for real estate enterprises to participate in the auction, and some key cities may reduce the margin ratio of the third batch of land plots.
"Changsha, Chongqing and other abortive auction withdrawal rate of the higher rate of deposit ratio of the city stock downward space, and Wuhan has been in the second batch of land supply during the listing of some of the land plots to reduce the deposit requirements. In addition, Beijing and other cities in the second batch of some large-volume plots suffered abortive auction or withdrawal, it is expected that the third batch or will be split into a number of small and medium-volume plots to be listed, reducing the capital threshold." Chen Wenjing said.
22 key cities in the second batch of land supply margin ratio situation
Increase the supply of land for rental housing
According to the previous requirements of the Ministry of Natural Resources, the annual land supply plan of key cities in a separate land supply for rental housing land accounted for a general percentage of not less than 10%, from the land end to expand the supply of guaranteed rental housing to provide policy support. However, according to incomplete statistics, the second batch of land supply at least 70 involving rental plots did not complete the transfer, and Changsha, Wuhan and Guangzhou and other cities retained the "bidding for self-holding" link, but some of the plots were sold at the bottom price or by the auction withdrawn.
"The supply of rental housing land in some cities has not reached the full-year plan, and it is expected that the third batch of plots involving rental land will still maintain a certain volume, of which Changchun has made it clear that the third batch of plots will no longer be supplied with residential land in principle. The third batch of land supply in key cities may optimize the conditions of the parcel bidding for self-holding, fixed self-holding/allotment, etc. (not excluding some cities to learn from Shanghai's practice of launching pure leasing land), and moderately adjust the initial land price downward to ensure that the profit margins of the project of the enterprises that took the land. In addition, some cities may upwardly adjust the proportion of the area of guaranteed rental housing in suburban plots, reduce the requirement of allotment or self-holding in remote suburban plots, and set a reasonable land price to guide real estate enterprises to rationally acquire land."
Reducing bundling restrictions to increase the willingness of real estate enterprises to participate
The China Index Research Institute believes that the third batch of land plots in some cities may optimize the pilot rules, reduce the bundling restrictions, and gradually promote the quality of the relevant requirements to the ground.
From the results of the second batch of land auctions, some cities to carry out the pilot effect is not good, including Guangzhou Nansha and Huangpu District pilot "limited house price" and require 50% of future sales tilted to homeless families, three plots of land aborted; Hangzhou, ten plots of land to pilot the "competition quality "and require the sale of existing homes, and ultimately due to insufficient enrollment all withdrawn; Shenzhen, the second batch of land supply re-listing restrictions on the number of "the same enterprise and controlling subsidiaries" to participate in the auction of land plots, and then issued a supplemental announcement to relax to the "same enterprise "; Changsha and other cities in the second batch of land bundled more restrictions, involving gratuitous building area, the introduction of listed companies, as well as science and technology, medical industry resources, 60% of the land by the abortive auction or withdrawn.
"It is expected that the third batch of land supply in some cities will optimize the pilot rules, bundling restrictions and quality requirements for land parcels, reduce the bundling restrictions for land parcels, adjust some of the pilot rules, improve the willingness of real estate enterprises to acquire land, and gradually promote the quality requirements." Chen Wenjing said.
Market will return to stability
According to the analysis of net-signature data from 25 first- and second-tier cities that Shell Research Institute focuses on, the Golden Nine and Silver Tenth of 2021 saw a decline of more than 20% compared with the same period of 2020 due to the impact of a high base. Comprehensive 2020, 2021 two-year data, the average value of sales area in September and October of the two years is at the same level as the same period in 2019 and slightly higher than the same period in 2018. Sub-city line level: first-tier cities 2021 September, October net sales area is higher than the same period in 2019 level; focus on the 21 second-tier cities 2021 September, October net sales area is lower than the same level in the past three years, but the average value of the last two years of September, October has been close to the level of 2019, higher than the same period in 2018.
Pan Hao, a senior analyst at the Shell Research Institute, said, "At present, the city's real estate regulation and control type of policy is basically no longer new, and the stabilizing attitude and measures are gradually increasing, and it is expected that the market will return to stability after digesting the impact of the high base in the previous period."
Chen Wenjing also said: "Since the end of September, the central government has released a series of stabilization signals, the recent marginal improvement in the credit side of Guangzhou, Foshan and other cities, Harbin introduced a policy to ease the pressure on the funds of real estate enterprises and increase the subsidies for home purchases, it is expected that the follow-up of more cities or will follow the fine-tuning of the policy, the market is expected to improve in the short term, but housing without speculation keynote of the policy regulation is difficult to say that greatly relaxed! The real estate market adjustment pressure is still there. It is expected that the third batch of plots of land under the optimization of the rules and conditions of the land auction, real estate enterprises to take the land is expected to marginal improvement, the overall situation of abortive auction and withdrawal of licenses or a slight improvement, but the market heat differentiation trend continues."
"It is recommended that while accelerating the marketing rhythm, real estate enterprises should strengthen the monitoring of the market and competing projects, and make use of digital tools for scientific decision-making to better realize staggered sales."