Real Estate: Property tax is gradually approaching to maintain neutral rating

Incident: Today, the State Council announced the "2009 to deepen the work of economic restructuring of the views."　　Among them, "opinion" clear, in 2009, to "deepen the real estate tax reform, research levy property tax". Property tax, also known as real estate tax and real estate tax, is a kind of tax which takes real estate as the object of taxation and is levied in real estate. After years of preparation, the levy of a property tax is expected to be clear in the near future. Obviously, once the property tax has been explicitly levied, in the short term, for the industry is a bad, but in the long term, the introduction of property tax, will be conducive to simplifying the real estate industry tax system, the current tax system "more taxes, heavy tax burden, heavy circulation, light retention" characteristics will have a major change; Moreover, nominal tax burden changes little. Specifically, we believe that: the collection of objects and scope: Two suites and commercial real estate. For investment demand is a big blow, the impact on rigid demand is small. The current property tax, the scope of its collection applicable to rental property. However, the object of property tax is extended to all eligible properties, whether for personal use or for rent, which is the biggest difference between property tax and property tax.　　Of course, given the acceptability of the domestic population, it is expected that the scope of the levy will be limited to the second and above housing, while the independent first housing will not be within the scope of the levy; Substitution of new and old taxes.　　Once the property tax is levied, it is expected that the property tax will be canceled synchronously, and the land value-added tax should be cancelled synchronously. As for the cancellation of the market's expected land transfer, taking into account the characteristics of local government "land finance", the possibility of a polar school tax base: Property valuation or rental income, most Tax Rate: Property evaluation value of about 1%. In view of the introduction of the property tax, the property tax will certainly be abolished, so in order to maintain the continuity of revenue, we expect that the tax rate will not be the same as the existing property tax, is expected to be around 1%.　　As regards tax rates in other countries and regions of the world, please refer to what we have shown in table 2 of this appendix. The external conditions of the levy: the relevant legal policy environment is basically possessed, but the operation details are yet to be perfected.　　The introduction of property law has provided a legal basis for the collection of real estate tax. Of course, China's property appraisal agencies have yet to develop, the relevant tax agencies to levy the property tax technical details, such as preparation work, still need to strengthen. The process of levying: the timing of the specific levy is difficult to determine, but the general direction will not change. It is expected that the pilot will start from some cities, and then gradually spread. With the early property tax in Qingdao, Shizuishan and other land "idling" the basic end, from "idling" to "real turn" will inevitably. Earlier, some cities, such as Shenzhen, on land value-added tax will be intensified liquidation of information, in fact, can also be regarded as a prelude to the levy of property tax.　　The pilot time for some cities is expected to be around the end of 2009; As for the time taken to complete the nationwide levy, we expect to be between 3-5 years, taking into account that the relevant conditions are yet to be ripe. Impact on related developers: highFor residential and commercial property developers, the imposition of property taxes will be a big negative. Vane: Policy has begun to turn, followed by a limited number of positive policies.　　The introduction of the study in the year, the introduction of the property tax and other information, marked since 2008, the policy has been relaxed, has changed, the follow-up good policy is limited. Intermittent release of rigid demand: Expected sales rebound is coming to an end, turnover will be irreversible. Early residential sales volume, the reason for the judgment is more consistent: the cumulative effect of policy, the accumulation of rigid demand, price and turnover of negative correlation.　　Therefore, for the early sales rebound, we have been positioned as a rigid demand for intermittent release. Determine the key factors in the real estate industry.　　For the real estate industry, in the short term, the supply basically remains unchanged, therefore, the market equilibrium price and sales are determined by effective demand; In the medium term, long-term demand is basically stable, the market is determined by the change in supply, and in the long run, demand determines supply. Population cycle and production cycle. There are three kinds of differences, the root cause is two different production cycle: first, the production cycle of housing development is longer, generally long microbicides; If you consider the time of land development and supply, real estate production cycle will be up to 4-5 years. Second, the population has a very long production cycle, which is clearly associated with the usual age of childbearing for women, while the age of childbearing in Chinese urban women is generally concentrated between 25-29 years.　　Clearly, the production cycle of the population represents changes in demand, while the production cycle of real estate represents a change in supply. Little baby boom: just an illusion.　　Looking back at the 2000 census data, we can see that one of the most recent birth peaks in China, the so-called "Baby boomers", will enter the 25-29-year range in 2011-2015 years. As far as the urban stock population is concerned, the main buyers are now in a downward trend. But this is a demographic structure that includes towns and villages, and it is not so simple to look at the demographic structure of a town.　　As shown in Figure 1 and Figure 3, it can be found that the so-called "little baby boom" is just a "baby boom" in rural areas. The birth population of Chinese cities and towns has been declining rapidly since 1982.　　From now on, if there is no immigrant population, the population of the 25-29-Year-old Chinese town, whether its absolute number or the proportion of the population, will gradually decline, and the downward trend will accelerate in 2015 years. Based on the 2000 census data, we can deduce the population structure of the 2008 Chinese cities and towns according to the above birth rate, the mortality rate, and the impact of the official 2001-2007-year population and population migration.　　As shown above, from now on, if the impact of future population migration is not taken into account, the decline in the number of people aged 25-29 and over in the Chinese urban population will be unavoidable. Urbanization: A slight delay in the main housing buyers under the crowdDownward trend. As for the urbanization of the mouth, we can quantify the influence of urban population structure by establishing the so-called population development equation. As shown in Figure 3, on the basis of the urban population data at the end of 2007, we assume that the population of the population will multiply in the future, and that for the net population of 2008-2050 years, we can consider the cumulative quantity and the related population, as the exogenous variables of the urban populations,　　Then we can calculate the influence of urbanization on the population and structure of the town. It can be seen that the number of people in our cities and towns between 25-29 years old began to decline rapidly this trend, urbanization has indeed improved, the 25-29-Year-old population peaked at the time postponed to 2015.　　But, after that, the downward trend is still inevitable. Rate of income ratio and population cycle. China now 12-15 times the price of income ratio, the crown of the world, has been the future rise in the basic overdraft of space. The international level of home price income ratio, generally 3-6 times; Of course, considering the characteristics of the complete monopoly of the land market, China's house price income is about 8 times times, may be a suitable level. In the long term, home price income ratios will return to a reasonable level after the 2015 population cycle peaked.　　Therefore, even taking into account the future growth of disposable income per capita, we believe that the future housing prices in China, it is difficult to have a more substantial room for increase. We maintain the industry at the end of 2010 difficult to see the bottom of the judgment, the previous policy, will extend the industry adjustment period, and the recent sales rebound to rigid demand for intermittent release, maintain the industry "neutral" investment rating. The recent rise in the real estate sector also reflects the impact of the sales rebound on the profitability of the companies concerned.　　The related company 2009 PE basically maintains between 25-30 times, 2010 PE basically maintains in between 20-24 times. We will downgrade the Jinrongjie investment from "buy" to "overweight", lower the investment rating of Poly Real estate, China Merchants Real Estate, Oct, Zhangjiang, the real development, Chinese enterprises, the first shares, Riverside Group, Shimao shares and Chinese trade, and lower the investment rating of Lujiazui, Pudong Jinqiao and Waigaoqiao. Reduction ", maintain on the Ka Bao Group, fuxing shares" buy "investment rating, to maintain the Vanke, Zhongtian City to invest in" overweight "investment rating, to maintain the gold Group, Wantong real Estate" neutral "investment rating, the first time to give the FA shares, Suning global" overweight "investment rating.