Event:
China’s Ministry of Housing and Urban-Rural Development (MOHURD) has drawn an Rmb900bn 3-year low-income housing program, according to Mr. Qi Ji, vice minister of MOHURD. He said that the government aims to solve the housing problem for 7.47mn low-income urban households by providing low-rent housing for 2.87mn families and subsidizing the other 4.60mn households to rent homes. Furthermore, the government plans to build 4mn economically affordable flats over the next three years, and renovate dangerous or old housing for SOE employees in the forestry, coal mining and agricultural development industries, solving housing problems for 2.2mn families. According to Mr. Qi, the central government will make “transfer payments” to fund the program, but the main financing sources should be local governments, households with housing problems, as well as their employers.
As a response to the State Council’s Rmb4tn plan to boost the Chinese economy, the MOHURD’s program can stimulate domestic demand, improve property supply structure, and support long-term stable growth of the commercially developed home market. However, we believe it has negative short-term impacts on this market, protracting the down-cycle of the real estate industry.
1.      Low-income housing program can help ensure social equality, reduce housing prices, and support long-term stable growth of the real estate industry. The low-income housing policy should have been introduced ten years ago during the housing reform in 1998. It is largely consistent with existing policies for the real estate industry since 2007. According to existing policies, low-rent housing should account for 10% of total housing, affordable flats and mid/small commercially developed homes should represent 20% and 30%, respectively. Low-rent housing in the new program exceeds this level, while the new affordable housing target is flat with the previous target.
Ø  Investment on low-rent housing exceeds expectations: Most of the Rmb900bn is to be spent on low-rent housing for 7.47mn low-income families and housing renovation for 2.2mn families living in shanty towns. Subsidies are to account for 60% of the total support, so the program can help boost demand in the home rental market. Actual low-rent housing provision accounts for 40% of the program, so the government has to develop or purchase 2.87mn flats as low-rent housing.
Ø  Affordable housing program consistent with expectations: The new program aims to build 4mn economically affordable flats in three years. The annual figure is below 20% of the annual sales of commercially developed homes (about 6mn flats in 2007). This is largely consistent with previous plans and market expectation (Table 1).
2. Short-term impacts on the commercially developed home market are negative but limited. Market participants believe the Rmb900bn program may erode the demand for commercially developed homes, further reducing expectations for home prices. As such expectations are critical in the industry down-cycle, we believe the policy initiative is negative to the real estate market in the short-term. However, the impacts on commercially developed home market should be limited, in our view. As we analyzed before, low-income/affordable housing and commercially developed homes target different market segments. From a mid/long-term perspective, improvements in market structure can help reduce bubbles and support healthy growth of the commercially developed home market.
3. Policy implementation is the key: According to the MOHURD, the new housing program is mainly to be funded by local governments, although the central government plans to make some “transfer payments”. Just like many other policy initiatives, effectiveness of the new housing program depends on financial strengths of local governments. As local governments rely on revenue from land use right sales but have limited land at hand for further sales, implementation of this policy initiative may face problems. Policy implementation is the greatest challenge, in our view.
4. Maintain ratings on property stocks: We do not believe the new policy can change the down-cycle of the real esate industry. The worst period has yet to come, and real estate stocks are unlikely to turn around. Industry leaders recommended by us face relatively less impacts from the downturn, and may actually benefit from the industry consolidation. A-share investors are advised to buy industry leader stocks on dips. H-share investors should take profit as valuations are already expensive. Those with P/B below 0.5x are worth our attention.

报告要点:

住房和城乡建设部副部长齐骥昨日接受采访时说，计划用三年时间， 总投资9000亿元人民币通过廉租住房的方式解决城镇747万户低收入住房困难家庭的住房问题，其中287万户通过实物配租的方式解决，460万户通过货币补贴的方式解决；同时，根据各地经济适用房建设规划，今后三年，全国还将建设400万套经济适用房，并将进行国有林业、煤矿、农垦职工的棚户区危旧房改造，大约解决220万户的住房问题。中央财政将给予一定的转移支付，但主要还是依靠地方政府、住房困难户本人以及所在单位等几方面的共同出资。
我们认为这是建设部配合国务院四万亿投资拉动经济的响应，该政策出台会促进内需的拉动、改善房地产行业供给结构、促进商品房市场长期稳定发展，但短期内对商品房市场影响是负面的，房地产行业的调整周期将相应的拉长：
1、 该政策是补课，有利于维持社会公平，拉低住房价格，促进房地产行业长期稳定发展；保障性住房是政府早就该做的工作，自从98年货币化分房以来，过去十年该政策缺失；从该政策的出发点来看，基本上与07年以来国家房地产行业政策导向一致，即10%廉租房加上20%经济适用房加上30%的中低价中小户型商品房，按照这个比例，廉租房超过计划，经济适用房符合计划。
-廉租房支出超预期：9000亿重点用于747万户低收入家庭住房和220万户棚户区改造家庭，以货币补贴为主（60%货币补贴，40%实物分配），所以对拉动租房市场需求有帮助； 而另外287万套的廉租房需要通过建设或购买来实现；
-经济适用房符合预期：而400万套经济适用房约占到商品房年销售套数不到20%（07年约500万套），基本上是按照20%的标准来做的，没有过多的超出预期。另外随着商品房市场的低迷，限价房供应出现萎缩，所以尽管经济适用房规模超出很多城市的计划（见表1），但加上限价房并没有明显的增加。
2、短期对商品房市场带来负面冲击，但冲击有限：市场对9000亿投入的解读将在短期内进一步下降购房预期，市场普遍观点将是对商品房市场需求带来挤压，而在房地产行业下降周期中，购房预期是关键，所以我们认为短期负面影响是存在的；但正如以往分析的，经济适用房与商品房是对应不同的市场需求，对商品房市场冲击有限，中长期来看，合理的市场结构有利于消化房地产泡沫促进商品房市场的健康发展。
3、政策执行是关键：按照建设部的说法，中央政策给与一定的转移支付，投资的主体还是地方政府，这与其它政策一样，政策的效果取决于地方政府的资金情况，而在土地相对紧缺的情况下，依赖土地财政使得地方政府执行改政策将打折扣，我们认为政策执行将是最大的挑战。
4、维持房地产股票建议不变：我们认为房地产行业下降周期不会随着政策的变化而改变，行业最差阶段还没有到来，地产板块难以出现反转，我们重点推荐的龙头地产公司受行业调整影响相对较小，而行业集中度的提高会使这些公司受益，所以A股可以逢低吸纳龙头地产公司，H股估值已经偏高，建议获利了结，可以关注P/B在0.5倍以下的公司。