CREC(SZ:000736) Sou Hu Cai Jing·2025-04-22 03:02Core Viewpoint - The real estate market is experiencing a downturn, affecting both state-owned and private enterprises, leading to significant financial losses and a reconsideration of investment strategies in the sector [1][3]. Group 1: Financial Performance of State-Owned Enterprises - China Communications Construction Company (CCCC) subsidiary, China Communications Real Estate, is projected to see a revenue decline of 44.59% in 2024, with a net profit loss of 5.179 billion yuan and a net asset reduction of 3.579 billion yuan [1]. - Another state-owned enterprise has announced plans to exit the real estate sector after incurring losses totaling 7 billion yuan over two years [1]. Group 2: Market Conditions and Risks - The overall real estate market is facing significant uncertainty, with national new housing sales area and sales revenue expected to decline by 12.9% and 17.1% respectively in 2024, indicating a decrease in market demand [4]. - There are concerns about potential price depreciation in the housing market, particularly in third and fourth-tier cities, where the risk of value loss remains high despite short-term policy measures aimed at stabilizing prices [4]. Group 3: Cost Increases and Investment Returns - Rising living costs, including property management fees and the impending implementation of property taxes, are expected to increase the financial burden on homeowners, potentially reducing investment returns in the real estate sector [6]. - The anticipated introduction of property taxes by 2030 could significantly raise the cost of holding real estate, impacting both investors and first-time homebuyers [6]. Group 4: Quality and Maintenance Concerns - The competitive pressure in the declining real estate market may lead to compromised construction quality, with developers potentially using inferior materials, resulting in safety hazards and maintenance issues for homeowners [8]. - Ongoing maintenance costs for properties, including repairs and community facility upkeep, are projected to add financial strain to homeowners, especially if property management services are inadequate [8]. Group 5: Strategic Recommendations - Given the current market conditions, it is advisable for potential buyers to prioritize cash liquidity and carefully evaluate housing options that align with their financial capabilities [10]. - The traditional approach of focusing on quantity in real estate development is becoming less viable; instead, companies should focus on quality and building a strong reputation to succeed in the evolving market landscape [10].