37 Cities Have Eased Buying Restrictions With Still Mixed Results

One line to sum up the situation:
Financing is increasingly difficult, tighter capital chain like a sword of Damocles hanging over the head of the real estate industry.

On mortgages: costs are coming down, with first-tier cities now seeing lower costs than second-tier cities. In the short-term though, banks aren't doing much else to relax lending.

Overall, the effect of the lifting of buying restrictions has been limited, but as I've said plenty of times, we'll know the real situation come September and October.

From Sina Finance:
37 City relax the restriction after investigation: prices still decline, banks do nothing to accelerate housing prices reshuffle

  Super 30 cities in the purchase difficult boost market deregulation, triggering capital market restlessness over a hundred housing prices rose over 10 percent, refinancing cold; CBRC repeatedly warning the risk of real estate loans, in some places the Banking Bureau has conducted several stress tests and risks thoroughly.

  Money Weekly reporter MEDICINE AND hope Feng Yuan / Beijing reports

  With 37 cities nationwide to relax the restriction, the property market after the purchase age limit discovered variations, north of Guangzhou-Shenzhen collective into a relaxed encirclement.

  Since July, the introduction of more specific measures strictly limited purchase policy in the past, a large area that instant release.

  But this booster did not give the property market continued cold excitement, reporters interviewed a number of people in the industry believe that if the policy is not only "loose mouth" effect, when the financing, credit policy efforts, it is worth looking forward to .

  However, banks motionless, face the market's expectations, the short-term loan to relax achieve basic hopeless.

  Money Weekly reporter found under agitation, housing prices are still facing tight financial chain, high inventories, market cooled and safe capital chain is particularly important, housing prices are also struggling to try to road financing.

  Restriction of capital market deregulation caused restlessness

  Relaxed one city purchase of the policy, frequently introduced in the hot August, more details of the world's best, pound like a fireball around the property.

  Quite sensational effect is Shanghai.

  In early August, the market rumors, Shanghai issued a Dahon mortgage documents under the New Deal, in which the first suite to relax the conditions identified, understood to be extended into a "first-tier cities in Shanghai in the first attempt to relax the credit limit." This rumor also put the country to relax the restriction to a climax.

  Even Shanghai's major banks almost unanimously denied rumors that article, the capital markets are still difficult to prevent pent transaction.

  Wind data show that as of August 21, available statistics 135 listed room rate, and since July, there have been 103 or exceeded 10%, while in the second quarter, an increase of over 10% of the room rate, only There are 21.

  Vanke, from January to June, its total sales area of 8.212 million square meters, the sales amount of 100.91 billion yuan, an increase of 14.6% and 20.6%, respectively, first half sales amount exceeded 100 billion, further consolidating its market position; real estate investment [ Microblogging] in the first half 2014 net profit fell 30 percent to 1.8 billion yuan, mainly settlement less decline in gross margin and higher investment income due to the same period last year.

  Poly Real Estate [microblogging] is concerned, the only project to obtain the cumulative July 2, from January to July the amount of land for 16.34 billion equity investment, which fell 13.73%; aspects Golden Group, revenue was recorded in the first half rose 3.3 percent to 9.08 billion yuan, net profit of 160 million yuan, up sharply down 49.9%, the performance is less sharply settlement area and the gross margin decline due to the double impact.

  Clearly, housing prices are still difficult to get rid of the haze this year.

  According to the National Bureau of Statistics, July, 70 cities, prices fell in 64 cities, there are four flat, rising city has two. Ring than price changes, the highest increase of 0.2%, the lowest was down 2.5%. It is worth noting that the current price decline is still not brought sales rebounded, although the majority of the city to relax the restriction policy, but the effect is not obvious sales.

  Public statistics show that there are 31 city official or rumored to relax the restriction. There transaction data of the city, after the 13 cities in the purchase relax render first high to low turnover trend, only two cities of Hangzhou and Foshan currently traded steadily rising, the rest of the city to relax after the purchase transaction did not change significantly.

  High inventory longer a secret between housing prices. In the first seven months, the national real estate sales area of ​​564.8 million square meters, down 7.6%, a decline of more than 1 to 6 months expanded 1.6 percent; late July, real estate for sale area of ​​552.3 million square meters, an increase of more than the end of June 8.02 million square meters.

  Sales weak, investment in housing prices is lukewarm. Money Weekly reporter learned that, by the end of July, ten benchmarking enterprises to purchase the total amount of equity 132.227 billion yuan, equivalent to only purchase the amount of last year's 4 percent. In early August, 20 wards in the sea there is only one enterprise value of 687 million cases of land acquisition.

  Curse refinancing

  One side is weak sales, while the investment lukewarm critical housing prices also increasingly tight financial chain.

  Publicly available data show that the first half of 2014, the accumulated funds in place developers continued to decline year on year growth. First half of the real estate developer funding 5.8913 trillion yuan, an increase of 3%, the growth rate down 3.6% over the first quarter of 2014. According to E-House Research Institute statistics, from the capital structure, housing prices in the first half of the self-financing enterprise funds available in the proportion rose to 40.4 percent, up 1.8 percent compared to the first quarter of this year, and higher than the same period last year 2.6 %.

  Financing more difficult, tighter capital chain like a sword of Damocles hanging over the head of the real estate business.

  Announcements, after this offering, the company's net assets will increase significantly, asset-liability ratio corresponding decline, after the completion of the company's total assets will increase to 41.715 billion yuan RMB, an increase of 10.08%. Beijing Urban Construction side said that the raised funds will be mainly invested in Beijing, a total of four development projects.

  It is worth noting that in the first half of this year, the Beijing Urban Construction will bear the capital chain tension questioned. That time, the Beijing Urban Construction successive sale of its assets. As of March 31, the Beijing Urban Construction assets and liabilities was 74.46%, net gearing ratio was 81.93%, lower than the industry average. Reporters learned that Beijing Urban Construction remains the main business of real estate development and sales, revenue on this project more than 90%. According to its announcement, the end of the fourth quarter of 2013, the real estate development and sales revenue of 73.9 billion yuan, while the main cost of the project up to 4.4 billion yuan, the cost ratio was 96.11%.

  No matter how clarify aspects of Beijing Urban Construction, institutional investors less and less for the Beijing Urban Construction of all ages. Late last year, there are 86 institutions hold Beijing Urban Construction, while decreasing all the way this year. By the end of the second quarter, only six institutions to hold Beijing Urban Construction, representing the proportion of tradable shares to 21.21% by the end, down 9.16 percent.

  Because too few of its own funds currently available Guoxing real estate development and sales of real estate just Guoxing North Shore Chongqing Jiangshan a project. As early as last August, it announced the non-public offering plan, the proposed total funds raised 1.49 billion yuan, of which 1.05 billion yuan for the North Shore 江山东 Guoxing area development, and the remaining complement the company's liquidity.

  Reporters learned that, after its issuance plan has been submitted to the Commission [microblogging] , currently under the Ministry of Land audit.

  A country estate in the first half performance has highlighted the company's capital chain tension. In the first half, net profit Guoxing estate 50 million yuan, an increase of up to 649% performance growth was mainly due to the Chongqing State-North Shore country project in 2014 in the first half B4, Building A1 submitted successfully achieve profits carried forward, unchanged from last year Sales of "lag" response.

  Semi-annual report shows that operating costs in the first half to 197 million yuan, while only 3.17 million yuan a year earlier, due to the increased area of ​​Chongqing Guoxing company submitted, resulting from an increase in the cost of carry. In fact, the country which currently has only one real estate project, and this year the project funds but also a substantial increase in its capital chain faces no small pressure.

  Recently, the city transit investment in the capital market performance is compelling. Since July, it has risen by 50.86%, now the housing prices more than 22 million square meters of land reserves, except for Nanjing 76,000 square meters, the entire focus in Guiyang.

  This only listed real estate company in Guizhou, refinancing matters are in preparation. Its June announcement shows, the number of shares to be non-public offering of not more than 40,847 shares, raising total funds of not more than 270,000 yuan. Funds raised will be used to: (a) an international financial center in Guiyang Business District project, (2) Guiyang Yunyan Yue, Yasui move back to resettlement residential area E group (public rental group) project.

  August 14, the city transit investment received Commission approval, the approval of its non-public offering of not more than 42,789 new shares.

  Under the refinancing progress, is a sudden increase in their costs. City transit investment semi-annual report showed that first-half operating income of 5 billion yuan, representing an increase of 94.74 percent over the same period last year, while in terms of cost, the cost of the first half of its real estate development and operation of 3.39 billion yuan, while only 14.4 last year billion.

  In an interview with the weekly financial reporters, a real estate investment and financing sources, several housing prices above can be achieved through non-public offering to refinance this year has been a rare case, "especially this year fall in property prices, some Housing prices in the case of small funds strand breaks makes refinancing difficult housing prices, the bank has been impossible, and real estate trusts are subject to more stringent regulation, financing more and less. "

  Banks can not contribute much

  The good news is that banks already have action levels.

  According to an informed source said that the current policy of the banks are considering real estate loans, especially mortgage loans, but the views of the CBRC is not clear guidance, will be let go, let go of to what extent, there is no clear message.

  For various banks, especially since 2013, the real estate industry and local government financing platform to overcapacity industries together industry is listed as the focus of risk management, credit control measures the proportion of real estate to become one of the bank's risk management and control.

  According to CBRC data show that as of the end of June 2014, China's banking sector real estate loans for 16.2 trillion yuan, accounting for 20.8% of the loan balance. Real estate loans under this statistical includes real estate development loans, including personal home loans, in which individual home loans accounted for about 67% of the real estate loans.

  However, as of the end of 2013, non-performing real estate loans of commercial banks rate well below the overall level of the bank, was only 0.48%. But many industry insiders believe that the risk of adverse real estate loans in 2014 may be much greater than in 2013.

  According to the reporter, since 2014, the CBRC has repeatedly warning the risks of real estate loans, some local banking regulatory bureau has conducted several stress tests and risks thoroughly.

  At the same time, overdue and bad real estate loans began to form is not limited to development loans, loans overdue mortgage defaults have been gradually exposed, second and third tier cities higher vacancy rates and lower average daily sales are magnified the risk of loan defaults .

  It is understood that this year, in Hangzhou, Wuxi, Jiangsu, Fujian Ningde, Xinyi, Jiangsu and other places have experienced real estate buyers due to personal and mortgage loans overdue by banks prosecution case.

  "For the development loan, the overall tightening of credit, short-term will not significantly relax, as the housing mortgage loans, many banks have begun to varying degrees of interest rate fluctuations, but overall relaxation remains great uncertainty." A state-owned large middle row analysts said.

  Earlier, media reports said ICBC branch in Guangzhou before the first suite of benchmark interest rates go up by 8% down to go up 5%. Earlier, the Agricultural Bank of China branch in part from the end of July beginning of mortgage interest rates lowered from 10% to 5%.

  Moreover, the China Construction Bank, Bank, HSBC Bank has lowered mortgage rates part of the region's news. In the region, in addition to Guangdong, Shanghai, Shaoxing, Zhejiang, Guangxi and other places have limited credit deregulation news.

  Even so, most banks have not yet substantially implemented policies related to mortgage, surfaced in individual regions of individual banks 'discount' is limited to a modest pullback floating rate of interest rate, credit offers relaxed yet hard to find even traces of credit.

  But there are people in the industry believe that, then, with the real estate transaction atrophy, may also appear scraping banks a new round of real estate credit business loan rates would decline, loan discount is also possible. Real estate credit policies of structural adjustment is more likely under the existing credit scale.

  Industry reshuffle small room rate worse

  Enter August, the mortgage market has changed.

  Public information display, the second week of August, the mortgage market over the actual cost of the mortgage interest rates began to substantial downside, first-tier cities overall mortgage interest rates lower than the second-tier cities, according to the current prime rate loan application from easy to difficult sorting followed by Beijing, Shanghai , Shenzhen and Guangzhou.

  In an interview with the weekly financial reporters, a senior real estate analyst believes that cancel the purchase policy has little effect on the first-tier cities, second-tier cities for boost volume may have some effect.

  "Housing prices collapsed capital stock or to go for the main purpose, but mortgage rates did not significantly decrease if so, small room rate of the day will be sad, do not rule out of some small housing prices may be, this is the next to face the industry The new situation. "the analyst said.

  Also worth noting is that after the real estate investment trust under strict supervision, some have larger scale real estate trust also tighten the real estate business.

  These real estate investment and financing parties, institutions, including financial trust, including Noah's wealth has been significantly reduced from last month, the real estate business, or even stop this business, financing for small and medium housing prices, it is worse .

  In his view, the current policy level can only look forward to substantial progress, such as changes in the current monetary policy is to release some signal, perhaps financing for small and medium housing prices generate support. "But the risk small room rate funding strand breaks can not be ignored, it is difficult to get rid of housing prices throughout the industry in the short term dilemma."

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