Under the "three red lines", the land market obviously reduces fever and the pace of debt reduction of real estate enterprises is accelerated.

SMM Network News: in the housing enterprise financing "three red lines" pilot background, the land market showed obvious signs of "fever".

In September, the average floor price of operating land in 300 cities across the country was about 2475 yuan per square meter, down 7.9 percent from the previous month, while the premium rate of land auction dropped to 14.8 percent, the lowest since April this year, according to Carey monitoring data. Among them, the land auction market in hot cities such as Chengdu, Changchun and Shenyang, which has been discussed by the Ministry of Housing and Construction, has seen a downward premium rate compared with the previous month.

In this regard, Yang Kewei, deputy general manager of the Kerry Research Center, pointed out that the reason why the local auction market has cooled down, in addition to some changes in land supply and transaction structure in September, is also related to the real estate enterprises themselves to adjust their investment strategies.

"the proportion of land supply and transactions in third-and fourth-tier cities increased significantly, while the proportion of high-quality land transactions in first-and second-tier cities declined further, which had a certain impact on the overall land price correction in September. In addition, the pilot of the new financing rules of the 'three red lines' has further tightened the funds of real estate enterprises, and the enthusiasm of enterprises to take land has declined somewhat, which also makes the premium rate of soil racket drop more obviously. " Yang Kewei said in an interview with the Financial Associated Press.

In the view of Wang Song, director of credit research at Zhongshan Securities, the recent changes in the land market also reflect, to a certain extent, that under the background of the new financing rules, real estate enterprises have gradually begun to standardize their land acquisition behavior.

"recently, the new financing rules of real estate enterprises, which have attracted much attention from all parties, are intended to make real estate enterprises reduce their debts and properly control the scale and speed of enterprise investment growth in the light of their own situation. This policy will help housing enterprises to form stable financial policy expectations, reasonably arrange their own business activities and financing behavior, reduce the probability of taking high-priced land, correct blind expansion behavior, and then play a positive role in stabilizing housing prices. " Wang Song said.

In addition, the upgrading of regulation and control in some hot cities also has a certain impact on curbing the overheating of the land market in the short term.

According to Carey statistics, in September this year, the supply of commercial housing in the country's 30 key cities increased by 37% month-on-month, with a new supply area of 37.16 million square meters of commercial housing; and the overall transaction area was 28.55 million square meters, down 4% from the previous month.

"the transaction heat of the new housing market fell back in September, mainly because of the booming supply and demand in July and August, and the transaction scale was relatively large. Under the continued release of demand, the transaction growth in September slowed down." Yang Kewei told reporters.

After a small supply peak in August, September ushered in another wave of supply growth, Cao Jingjing, research director of the Index Division of the Central Index Institute, pointed out that to a certain extent, this is related to the prediction of the market trend of the fourth quarter by housing enterprises. "in the past, many enterprises will concentrate on volume to speed up sales at the end of the year, but many housing enterprises think that the sales pressure is greater in the fourth quarter of this year, and the supply node is slightly ahead of schedule this year."

Lu Wenxi, a senior researcher at Central Plains Real Estate, believes that the sales side is still facing regulatory pressure in the fourth quarter, but the overall market turnover is expected to remain on a certain scale. To adapt to the conditions set by the new financing rules, property companies will have to improve leverage while slowing debt growth. In order to speed up the return of funds and efforts to consider, real estate companies in the sales side may appropriately abandon some profits, in order to achieve the goal of deleveraging and reducing debt.

With regard to the trend of profits of real estate companies, Moody's, an international rating agency, recently believed in a report that the gross profit margin of real estate companies may be reduced due to rising unit land costs and house price control policies. Moody's pointed out that the weighted average gross margin of real estate companies in 2019 and the first half of this year was 31 per cent and 29 per cent, respectively, while the weighted average gross margin of real estate companies for the whole of 2020 and 2021 is likely to narrow to about 28 per cent.

"judging from the current public information, the goals set by the new financing rules will affect many aspects of the market. But regulators have given real estate companies enough time to reduce their debt and adjust their business strategies to achieve their goals. In this context, housing enterprises should change their previous aggressive investment strategies, seize the opportunity to speed up sales to withdraw funds to reduce liabilities, and timely adjust expectations for the future in order to adapt to the new environment. " Yang Kewei told reporters.

From the point of view of the sales of housing enterprises, according to the latest data released by the Central finger Academy, from January to September this year, the sales of 21 housing enterprises exceeded 100 billion yuan, and the sales of 137 real estate enterprises exceeded 10 billion yuan, including country Garden sales of more than 600 billion yuan and China Evergrande sales of more than 500 billion yuan. In the first three quarters of this year, the average sales target completion rate of the 20 representative enterprises was 72%.

"although there are frequent regulation and control policies on the property market, the expectation of market stability has not changed significantly, and it is expected that most housing enterprises are expected to achieve their annual sales targets. But on the other hand, regulators put forward specific requirements for housing enterprises to reduce their debts, which may bring a lot of pressure to the next sales and operation of housing enterprises. " Lu Wenxi said.