China Index Academy: New Policies Reshape Real Estate Developers' Investment and Land Acquisition Logic; Land Auctions Show Characteristics of Cautious Investment and Preference for Small- to Medium-Sized Plots

Zhitong Finance APP has learned that the China Index Academy stated in an article that the "828 New Policy" raised pre-sale conditions and pushed back payment collection milestones, significantly lengthening the capital occupation cycle of projects from land acquisition to payment collection, markedly increasing de-stocking risk, and significantly raising the land acquisition risk for real estate enterprises. Once a wrong plot is selected, it will result in a huge accumulation of capital. In terms of investment models, as measurement assumptions such as de-stocking milestones and payment collection milestones change, project cash flows are reshaped, and investment measurement models need to be rebuilt. In terms of cities for land acquisition, the investment logic of real estate enterprises will further focus on the certainty of plot de-stocking, and land acquisition will converge toward plots in core areas of core cities that are small in scale, low in total price, capable of rapid completion and filing, and low in floor area ratio.