China News Service, Beijing, December 2 (Reporter Pang Wuji) Qin Hong, former director of the Policy Research Center of the Ministry of Housing and Urban-Rural Development of China, stated at the "2021 China Real Estate Big Data Annual Conference" on the 2nd that real estate companies can be roughly divided into four categories, of which , Real estate companies that "finance high interest money and take high prices" face higher risks.
Qin Hong said that in the history of China's real estate market this year, the front end (development, investment, new construction) and end (sales) rose at the same time in the first half of the year, and the front end and end fell at the same time in the second half of the year.
Investigating the reason, Qin Hong analyzed that since August last year, the official management of the "three red lines" of financing for key real estate enterprises and the management of the concentration of real estate loans of commercial banks implemented this year have brought about the demand and supply of funds for the real estate industry. Tighten both ends at the same time.
This has changed the "three highs" development model of high leverage, high turnover and high gross profit in the real estate industry over the past 20 years.
In addition, the breach of contract by leading real estate companies has brought about a series of chain reactions. Financial institutions, local governments, and home buyers have a significant decline in the risk appetite of the real estate industry, so the market has undergone a rapid turnaround.
Qin Hong believes that some real estate companies are indeed facing greater liquidity risks, but they need to be considered by classification.
She divided the real estate enterprises into four categories.
The first is the risk of real estate companies' cross-border transition and diversified investment.
In fact, these types of companies are not real estate risks, but only individual companies, not many.
The second is that the real estate companies that raised high interest money and took high prices in the past have higher risks.
Qin Hong pointed out that the development pattern of China's real estate has been completely different from the past-places where market demand is strong are often limited prices, and where prices are not limited, demand for home purchases is weak.
However, the "three highs" development model of real estate companies will not work if they lack high prices.
Therefore, companies that have raised high-interest money in the past and grabbed high-priced land will face the problem of unsustainable business models and higher risks.
The third is the real estate enterprises affected by policies and other factors.
Although such enterprises have debts, they have good brand effects, low financing costs, low land prices, and stable operating cash flow.
Fourth, real estate companies with low debt ratios.
They may be leading companies in third- and fourth-tier cities, but these companies are not on the bank's "white list", cannot raise money, and have a very low debt ratio.
The latter two are still affected by the tightening of the financial environment, but Qin Hong said that as long as the normal demand for real estate financing can be restored as long as the policy is adjusted, the steady development of these two types of enterprises can be expected.
In the past, the real estate industry has always been "the big ones will always be big, the strong ones will always be strong", but Qin Hong pointed out that in the future, a new differentiation pattern of these four types of enterprises will inevitably appear, and real estate enterprises may no longer "talk about heroes" in terms of size.
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