Propertysalesvolumeflatyoy,ASPdown0.5%yoyinJun14.
NationalcommoditypropertytransactionvolumesinJuncameinatGFA123mnsqm(+47%mom/+0%yoy).ASPwasRmb6,067/sqm(-5%mom/-0.5%yoy),resultinginJunpropertysalesofRmb746bn(+39%mom/-1%yoy).Amongregions,JunvolumesinEastern,Central,andWesternChinawere-9.9%,+6.2%and+12.6%yoy,respectively.YtdasofJun,volumestoodatGFA484mnsqm,-6%yoy(vs.-8%inJan-May)andASPreachedRmb6,437/sqm,-0.8%yoy.Asaresult,Jan-JunpropertysalesofRmb3,113bnwere-7%yoy.
Newstartsandinvestmentgrowthpickedupfrompreviouslow.
NationalpropertyinvestmenttotaledRmb1,128bninJun,+34%mom/+12%yoy(vs.+21%mom/+10%yoyinMay).Newstartswere+21%mom/-9%yoytoGFA202mnsqm(vs.+18%mom/-15%yoyinMay).1H14,propertyinvestment,GFAnewstarted,GFAcompleted,GFAunderdevelopmentwere+14%,-16%,+8%,+11%yoy.
Landpricepremiumnarrowedto5%vs.lasttroughof1%inFeb12.
Ourmonitoringof302cities’totallandmarketactivitiesindicatethatJan-JunlandGFA/revenuetransactedwere918mnsqm/Rmb1,200bn(-21%/-2%yoy).
Revenuewas+10%mom/-29%yoyinJun(vs.-16%mom/-32%yoyinMay),withanaveragepriceofRmb1,138/sqm.Thepremiumratefurthernarrowedto5%(vs.11%inMay).Property-relatedlandsaleswas+13%mom/-22%yoyinJuneand-19%/+0%yoyin1H14intermsofGFA/salesrespectively.
StrongJunsalesreportedbydevelopers;marketsharegains.
21developersunderourcoveragewithavailableJunsalesdata:vols(+40%mom/+31%yoy),sales(+35%mom/+40%yoy),ASP(-4%mom/-7%yoy).
Ourinvestmentview.
1H14newstartyoydeclineislargelyinlinewithourfull-yearest.ofdown17%yoybutpropertysalesvol.declineis(-15%yoy),suggestingslightlybetter-thanexpectedpaceofinventoryadjustment.Ourfull-yearprojectionindicates-18%and-21%yoydeclineofnewstartandsalesvol.for2H.Buyideas:CG(onCL),Vanke-A(onCL),E-House,Sunac,CRL,Shimao,COGO,Poly-A,CMP-A,Longfor,Leju,Vanke-H.Sellideas:Gemdale,Yanlord,ShuiOnLand.Keyrisks:Substantialimprovement/deteriorationindevelopers’balancesheets;better/worsemacroconditions/policyloosening.