Goldman Sachs(US:GS) Sou Hu Cai Jing·2025-06-22 05:39Core Viewpoint - Goldman Sachs' report indicates that the "golden era" of China's real estate has completely ended, highlighting significant challenges facing the industry [2] Group 1: Demand Decline - Future annual new housing demand in urban areas is projected to plummet to 4.1-5 million units from a peak of 20 million units in 2017, representing a 75% decrease [5] - The decline in demand is driven by three structural factors: population decline, slowing urbanization, and shrinking investment demand [5] - Population decline has begun since 2022, with projections indicating a reduction of millions annually by 2030, leading to a decrease in housing demand by 1.4 million units per year [5] - The primary homebuyer demographic is shrinking, with a 35% drop in marriage registrations and a 40% decrease in newborns over the past eight years [6] - Urbanization rate is expected to reach 67% by the end of 2024, with only a 3% increase to 70% by 2030, indicating a significant slowdown in rural-to-urban migration [8] - Investment demand is expected to shift to a net sale of 1.8 million units annually from 2025 to 2030, as housing prices continue to decline [9] Group 2: Market Divergence - Developers and investors are retreating, with Hong Kong-listed property stocks dropping by 2%-4% and new project starts at only 20% of peak levels [11] - Inventory pressure varies significantly between cities, with first-tier cities facing an 18-month inventory cycle, while third and fourth-tier cities experience cycles of up to 28 months [11] - The national housing stock exceeds 370 million units, leading to an average of 1.16 homes per household, with some areas having 1.4 homes per household [11] Group 3: Future Changes in Real Estate - The role of second-hand homes is expected to increase, with new home sales projected to drop to one-third of 2021 levels by 2035, while second-hand transactions may rise to 66% of the market [13] - A significant reshuffling of developers is anticipated, with stronger companies dominating the market and state-owned enterprises becoming key players due to financial and policy support [13] - The government plans to allocate 10 trillion yuan to convert commercial housing into public rental housing, but faces an 8 trillion yuan funding gap [13] - The focus of housing is expected to shift back to its primary purpose of residence, with an increased emphasis on improving living conditions and home renovations [13]