[SMM thread] Real estate "internal and external strict", take the enthusiasm or will cool

Since the second quarter, property market regulation and control measures have been upgraded. The size of new real estate trusts continued to rise in the first half of the year. By the end of May 2019, the balance of real estate trust assets was 3.15 trillion yuan, accounting for 14 percent of the total trust assets balance, an increase of 166.597 billion yuan over the beginning of the year, an increase of 15.15 percent over the same period last year.

Real estate trust is growing too fast, and the property market falls into capital-catalyzed arbitrage that violates the return of funds to the real economy and the tone of "housing does not speculate". Therefore, the regulatory level of real estate enterprise financing control has never been relaxed, and continue to strengthen the monitoring of illegal real estate enterprise financing. Since July, regulators have provided "window guidance" to real estate trusts and suspended the raising and delivery of new projects. Among them: equity income rights, specific asset income rights, or arrangements for gambling and other ways for housing enterprises to provide land front-end financing and other models have been suspended. On the other hand, for loans and real equity investment that meet the requirements of 432" (project four certificates complete, 30% capital and secondary qualification), in terms of industry investment, projects such as indemnificatory housing, industrial incubation, urban renewal or old city transformation, rigid demand housing, and so on, have been strongly encouraged.

Domestic financing has become stricter, and housing enterprises are forced to choose to issue bonds overseas. Since 2019, housing enterprises plan to issue 104 foreign debts, with a planned issuance size of US $38.447 billion, reaching record highs in the same period. And close to the full scale of 2017. But overseas financing channels are also gradually tightening. On July 12, the NDRC issued the Circular on the requirements for filing and Registration of Foreign debt issued by Real Estate Enterprises, which explicitly requires that foreign debt of real estate enterprises can only be used to replace medium-and long-term overseas debt in the coming year.

The general environmental policy continues to tighten, and the internal situation is not optimistic. According to Wind statistics, in 2019, the number of domestic debt matured by housing enterprises was 508, with a total repayment amount of 530.302 billion yuan, an increase of 28.88 percent over the same period last year. In addition, in 2020 and 2021, the maturity of domestic debt of housing enterprises will reach 445.351 billion yuan and 683.724 billion yuan respectively. A few years ago, housing companies issued a lot of US dollar bonds, but now gradually enter the debt repayment time. According to Wind statistics, 66 overseas bonds matured in 2019, with a maturity of $23.757 billion, an increase of 30.91 per cent year-on-year. In addition, in 2020 and 2021, the maturity of overseas bonds will reach $29.786 billion and $31.638 billion, respectively.

The debt repayment period is pressing step by step, the financing environment is also tightened day by day, the housing enterprise will undoubtedly face the huge test in the second half of the year. Housing enterprises to take the source of funds tightened, the enthusiasm for land will also be curtailed.