As a top priority in the current operation and management of real estate companies, the work of ensuring delivery has been steadily advanced in the first half of this year. According to statistics from the third-party institution Yihan Think Tank, from January to June 2024, a total of 1.386 million housing units were delivered by 60 real estate companies.

Among them, the delivery advantages of leading companies are evident, with the top 10 real estate companies delivering a total of about 730,000 units, accounting for more than 50% of the total delivery volume of the 60 companies; among the top 10 real estate companies, the number of state-owned and private enterprises is evenly divided, and the proportion of delivery units is also basically a fifty-fifty split.

Specifically, Country Garden delivered a cumulative total of 154,500 housing units and a delivery area of 18.22 million square meters, leading the industry in delivery volume; Poly Development and Vanke Real Estate followed closely with delivery volumes of 81,000 units and 74,000 units, respectively. In addition, several companies such as Greenland, China Overseas, Greentown, Sunac, and Xincheng have delivery scales exceeding 50,000 units.

As delivery capability has become one of the important indicators to measure strength, real estate companies are not only striving to deliver on time but also making efforts to deliver ahead of schedule and continuously improve delivery satisfaction.

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From January to June 2024, among the approximately 50,000 residential units delivered by Longfor, 20% of the projects achieved delivery more than a month ahead of schedule, with a delivery satisfaction rate of 90%; China Overseas had about 30% of projects delivered ahead of schedule, achieving a satisfaction score of 91; in the approximately 43,000 new houses delivered by Gemdale in more than 70 cities, some projects also achieved early delivery, with immediate certificate issuance upon handover, and the customer satisfaction rate exceeded 90%.

This achievement is inseparable from the regulatory authorities' high attention and support for ensuring delivery. "White list" financing is a key part of policy support.

In January of this year, the "Notice on Establishing a Coordination Mechanism for Urban Real Estate Financing" jointly issued by the Ministry of Housing and Urban-Rural Development and the Financial Regulatory Administration, became one of the important policy measures to provide financial support for the construction of unsold and undelivered commercial housing projects.

After the policy was introduced, city governments and banks responded quickly, with many regions setting up special teams for real estate financing coordination, issuing detailed rules for the implementation of financing coordination mechanisms, and promoting the accelerated implementation of real estate "white list" project financing, supporting the reasonable financing needs of real estate companies with different ownership structures.

For example, in Jinshui District of Zhengzhou City, the "one building, one policy, one special team, one bank" promotion mechanism was adopted, with the government, banks, and enterprises working together, with a leading bank participating in each project to ensure delivery, formulating financial support plans for each project, and accurately solving the most troublesome funding issues for real estate projects.

As of May 16, 297 prefecture-level and above cities have established urban real estate financing coordination mechanisms, and commercial banks have approved "white list" project loans amounting to 935 billion yuan.Several real estate companies have also received support from the policy. As of July 3rd, CIFI Group had 72 projects shortlisted for the real estate project whitelist, with 45 projects having already received financing support, including 3 new financings; Greenland Group also had 18 "whitelist" project financing applications approved by banks, with a total approved amount of 3.798 billion yuan, mainly consisting of new financings; and Seazen Holdings had over 100 projects apply for the "whitelist," with a pass rate of more than half, and the additional drawdowns plus the extended limits exceeding 1 billion yuan, etc.

Industry insiders have indicated that a relatively healthy debt-to-asset ratio is conducive to gaining the recognition of financial institutions, which is also one of the key factors in accelerating the implementation of new financing.

It is worth mentioning that this year, the delivery scale of most real estate companies has significantly shrunk. Data provided by Yihan Think Tank shows that among the top 30 real estate companies by delivery scale, only 7 have seen a year-on-year increase in the number of units delivered, including Vanke, China Resources Land, Sunac, Zhongliang, and Agile, while the delivery scale of other real estate companies such as Greenland Group and Yajunle has decreased by more than 40% year-on-year.

Liu Shui, Director of Enterprise Research at the China Index Academy, analyzed that this is due to the large delivery scale of real estate companies in 2023, coupled with a sharp decline in sales volume following corporate debt defaults, leading to a noticeable reduction in the current volume that needs to be delivered, and thus the delivery scale has also correspondingly decreased in the first half of this year.

In fact, the delivery volume of many companies may continue to decrease in the future. Liu Shui stated that real estate sales have been poor in recent years, and the number of projects requiring construction and completion has significantly decreased, with an expected gradual reduction in completion and delivery volumes in the future. Several real estate company insiders have candidly admitted to Yicai that 2023 is the peak delivery year for their companies, and thereafter, due to the reduction in sales scale, the future delivery volume will also decrease.

Another significant impact of the decline in sales is the substantial reduction in the liquidity of real estate companies. An industry research report obtained by Yicai shows that among the surveyed companies, due to the sluggish sales performance, the general decline in enterprise sales collections ranges from 10%-30%, 30%-50%, to more than 50%, with the respective proportions of companies being 46%, 31%, and 23%.

Under the circumstances of tightened financing, difficult inventory turnover, and poor sales, the pressure on corporate cash flow is becoming increasingly apparent. The aforementioned research report indicates that about 85% of companies say that the cash flow pressure in 2024 is relatively tight or tight. Liu Shui stated that the tight funds of real estate companies will also affect the construction progress of projects to a certain extent.

However, the industry believes that the delivery situation of real estate companies will continue to improve in the second half of this year.

On June 24th, the Ministry of Housing and Urban-Rural Development and the China Banking and Insurance Regulatory Commission jointly held a video conference on the policy training for housing delivery, carrying out policy interpretation and training for housing delivery, and guiding various places to effectively carry out housing delivery work and protect the legitimate rights and interests of homebuyers. It can be seen that ensuring housing delivery remains the primary task.

Liu Shui stated that the regulatory authorities still attach great importance to the work of ensuring housing delivery, continue to strengthen guidance on housing delivery work, and the "whitelist" support for real estate company project financing is expected to accelerate implementation and effectiveness. Efforts will be made to promote the financing of subsequent batches of "whitelist" projects, and continuous support will be provided for real estate project financing, ensuring the construction, completion, and delivery of real estate projects.