The Zhitong Finance App learned that Ping An Securities released a research report saying that unlike previous “progressive” policies such as easing housing and not lending, the Shanghai New Deal is a combination of multiple policies, which are stronger and more wide-ranging. It stabilizes the market and enhances confidence through various methods such as reducing down payment costs for mortgages, lowering the threshold for home purchases, and releasing improved demand. It is expected that Shanghai's turnover will pick up in the short term. In the medium term, the strength of the “5.17” policy has surpassed 2008 and 2014-2015. Shanghai's “527 New Deal” is also Shanghai's strongest supported policy since 2011. They all reflect the central government's determination to remove inventory and stabilize the market. If subsequent property market stability falls short of expectations, stronger policy support is still expected.

The main views of Ping An Securities are as follows:

On May 27, Shanghai issued the “Notice on Policies and Measures to Optimize the Stable and Healthy Development of the City's Real Estate Market”, which proposes nine policies and measures, including adjusting and optimizing housing purchase restrictions, optimizing housing credit policies, supporting reasonable housing needs of families with many children, supporting “trade-in”, and optimizing land and housing supply.

Lower the threshold for non-household registration purchase restrictions and adjust the relevant policy standards

In terms of purchase restrictions, the threshold for non-Shanghai home purchases has been drastically reduced, from the 5-year social security requirement to 3 years, and the scope of non-domiciled single purchases has been extended to new homes outside the outer ring and second-hand housing. The social security period for talent buyers has been changed from 3 years to 2 years, and the scope has been expanded from industrial zones to administrative districts; for improved demand, families with many children can purchase 1 additional housing unit on top of the limited number of units purchased, while optimizing the determination of the number of first-time housing units for multi-child families to reduce their interest burden on home purchases.

Furthermore, the New Deal abolishes the policy of “combining the number of units purchased after three years of divorce” and “including the number of housing units of the grantor within 5 years of donation”, and no longer limits the number of housing units purchased by enterprises that purchase small-sized second-hand housing (meaning second-hand housing completed before 2000 and with a construction area of 70 square meters or less) for employees to rent, etc.

Optimize housing credit policies in parallel to continuously reduce residents' housing purchase costs and thresholds

The first commercial loan down payment was reduced from 30% to 20%, the second set of down payments will be 35%, and the key six regions will have 30%; the first commercial loan interest rate will be reduced from 3.85% to 3.5%, the second set will be 3.9% from 4.25%, and the key six regions will be 3.7%. The mortgage interest rate adjustment range is as much as 35 bps, significantly reducing mortgage costs for home purchases. Under the premise of 10 million housing, 30% of the original down payment and interest rate of 3.85%, the 30-year equivalent monthly salary was 32,816 yuan. The total interest amount was 4.81 million yuan, and the New Deal down payment was reduced to 2 million yuan. The total monthly salary and interest were 35,924 yuan and 4.93 million yuan, respectively. Under the premise that the down payment was reduced by 1 million yuan, the total interest increased by only 120,000 yuan.

In terms of provident fund loans, the loan amount for the first set was adjusted from 1.2 million to 1.6 million (additional 20% increase for families with many children), and the amount for the second set of loans was adjusted from 1 million to 1.3 million. Furthermore, the New Deal also has supportive measures in supporting state-owned platform companies to collect and store housing, supporting families in need to “trade in for new”, and promoting the “two old and one village” renovation. Compared horizontally with other first-tier cities, Shanghai's current restrictions on overseas household registration purchases are almost the same as Shenzhen, and the loan restriction policy has been relaxed in Beijing and Shenzhen.

In terms of individual stock investment, considering the implementation of policies, the short-term sector is growing too fast

It is recommended to select individual stocks. Short-term suggestions prefer housing enterprises that benefit from government land acquisitions and are expected to revitalize existing assets to ease financial pressure, such as Vanke A (000002.SZ), Jindi Group (600383.SH), and Xincheng Holdings (601155.SH), and focus on relatively inexpensive valuations of Yuexiu Real Estate (00123), Greentown China (03900), China Overseas Development (00688), Poly Development (600048.SH), China Merchants Shekou (001979.SZ), Huafa Co., Ltd. ( 600325.SH), and also focuses on leading segments such as Property Management: Poly Venture (06049), Investment Savings (001914), etc.; Construction: Greentown Management Holdings (09979); and Broker: Shell (02423).

Risk warning: 1) If the timeliness of subsequent policy improvements falls short of expectations, it will cause the property market adjustment to expand and the adjustment period to prolong, which will have a negative impact on the development of the industry; 2) the risk that liquidity problems of individual housing enterprises will ferment and the chain reaction will exceed expectations; 3) Short-term fluctuations in the real estate industry will exceed expectations.