Author: Zheng Na

The current recovery in the property market is not enough to form sufficient motivation for all developers to devote themselves to the land market. In the first two months of 2023, income from local land sales is still not satisfactory.

According to data recently disclosed by the Ministry of Finance, from January to February, the budget revenue of the national government fund was 1.2 billion yuan, down 6965% year-on-year; Among them, the income from the transfer of state-owned land use rights (that is, land transfer income) in local government funds was 24.5627 billion yuan, down 29% year-on-year.

According to data from Huachuang Securities Research Report, the growth rate of government fund income in January and February expanded from December last year, mainly because the decline in land sales income expanded from 1.2% in December last year to 12%, the lowest monthly since July 12.

This is also due to the impact of lagging land transfer revenues. The above-mentioned research report pointed out that the price of the land transfer contract can be paid into the treasury in installments, usually 50% of the down payment, and paid within the remaining one year. This makes the repair of land sale income lag behind the total price of the land sold, such as the land transfer contract signed in December last year, part of the price will be put into the warehouse in the first half of this year to form land sale income. The total price of the land transacted in Baicheng of Wind caliber is the contract price, and the income from the sale of land is the actual storage. Therefore, in the first two months, the total price of land transacted in Wind caliber Baicheng fell by only about 12.7%, and the repair of land sale income was obviously lagging behind.

On the other hand, the industry believes that the key to the sluggish income from land sales is that the land market transaction is still cold, and the demand for new land by land-acquiring enterprises is reduced. Analysts from third-party research institutions revealed to reporters that although the market has recently shown signs of recovery, "companies have reported that they are relatively flat in the market and will not easily take the land." ”

A person from a TOP20 housing company also revealed to reporters, "Since last year, we have not taken much land, some cities have run out of land, if the market is good after that, may take land to continue to cultivate, if the market situation has not improved significantly, may also give up the city." ”

Even developers who have spare power to invest in land are calculating the direction of funds more carefully. The head of investment in East China of a large real estate enterprise told reporters that in the case of limited funds, there will be priority in investment strategy and new investment in cities with higher energy levels.

According to data disclosed by Clarion, the total investment scale of the top 2 housing companies in February still fell by about 20% year-on-year; At the same time, only <> of the top <> housing enterprises have deposits, and they are mainly state-owned enterprises and some high-quality regional housing enterprises.

In fact, the phenomenon of developers disappearing from the land market is common in 2022. According to the "2023 China Top 2022 Real Estate Enterprises Research Report" released by the China Index Research Institute, in 50, the total amount of land acquired by the top 53 representative enterprises decreased by 8.74% year-on-year, and the total land area decreased by 8.<>% year-on-year.

This situation has contributed to a significant decline in the national land sales revenue in 2022. According to data from the Ministry of Finance, in 2022, the budget revenue of the national government fund will be 77879,20.6 billion yuan, down 66854.23% from the previous year; Among them, the income from the transfer of state-owned land use rights in local government funds was 3,<>.<> billion yuan, down <>.<>% from the previous year.

However, according to the "Report on the Implementation of the Central and Local Budgets in 3 and the Draft Central and Local Budgets in 16" disclosed by the Ministry of Finance on March 2022, the budget revenue of the national government fund in 2023 is expected to be about 2023.7 trillion yuan, a slight increase of 81.2022% over 0.

CITIC Securities believes that this indicator means that the budget can accept the fact that the income from the transfer of land use rights will decline in 2022, and does not expect the land market to return to the situation before 2021, that is, relying on the land market to significantly increase local fiscal revenue, but it cannot accept that the land transfer fee will continue to decline at a rate similar to the decline of more than 2022% in 20.

"Considering the timing of the budget formulation, this does not indicate that the fiscal is blindly optimistic about the current situation of the real estate market, but that the budget is full of confidence in the recovery of the real estate market and the effectiveness of the policy." CITIC Securities believes that the policy does not intend to use real estate as a tool to stimulate the economy in the short term, but it does attach importance to the role of real estate as a pillar industry for macroeconomic stability. The basic stability of the budget revenue of local government funds remains the goal pursued by the policy. In the medium term, recurrent items in fiscal revenue that can replace the income from the transfer of state-owned land use rights are still rare.

The above-mentioned institutions expect that in 2023, except for some high-level cities, most urban land markets in the country are expected to show a recovery trend driven by policies. Soochow Securities expects the actual recovery of land sale income to be in the second half of 2023.

It is worth mentioning that the current land market has shown signs of recovery driven by the centralized supply of high-quality land plots in core cities.

Since February 2023, land auctions have shown a certain degree of popularity, with many land plots in Beijing, Suzhou, Hangzhou, Nanjing and other land plots reaching the top, and the premium rate is as high as 2%. Among them, Hangzhou has successively carried out the fifth batch of centralized land supply in 7 and the first batch in 2022, both times maintaining a high market popularity, and 2023 real estate enterprises in the north plot of Xiaoshan City even participated in the lottery. However, Zhengzhou, which conducted soil auctions at the same time, performed coldly, with all land plots sold at reserve prices, and there were cases of floating auctions.

From the perspective of enterprises that have taken land, private housing enterprises including Binjiang, Weixing, Zhongtian Mei, etc. have made gains, but the overall land acquisition is still dominated by state-owned enterprises. According to Clarion data, from January to February, the amount of land taken by Yuexiu Real Estate and China Railway Construction increased by more than 1% year-on-year, and the amount of C&D increased by 2% year-on-year, and the land sales ratio was significantly higher than the industry average.

Kerry believes that the participation of some private enterprises in the land auction and their gains have undoubtedly released a positive signal, and whether the follow-up can continue depends on their own operating conditions, and the future land market is likely to show a trend of point recovery.