Industry Overview - The current real estate market remains under pressure, with no significant recovery observed. The fundamentals are still bottoming out, as indicated by a 6.5% year-on-year decline in national commodity housing sales from January to July 2025, which is a 1.0 percentage point increase in the decline compared to the first half of the year [2] - In July 2025, commodity housing sales and sales area were at 43% and 44% of the levels seen in the same period in 2019, marking the lowest levels since 2022 [2] Pricing Trends - The average selling price of new commercial housing is 9,613 yuan per square meter, reflecting a 2.6% year-on-year decrease, with the decline expanding by 0.5 percentage points compared to the first half of the year [3] - In July 2025, the selling prices of new residential properties in 70 cities decreased by 3.4% year-on-year, while the prices of second-hand homes fell by 5.9% year-on-year, although both categories have shown signs of narrowing declines [3] Policy Changes - In August 2025, Beijing and Shanghai implemented demand-side policy relaxations, allowing eligible families to purchase homes without restrictions outside the fifth ring road, and recognizing single adults as families for purchasing purposes [3] - Shanghai also adjusted commercial loan rates, removing the interest rate floor for first-time homebuyers and no longer distinguishing between first and second homes [3] Market Performance - The real estate sector outperformed the CSI 300 index by 0.3 percentage points this month, with an 11.3% increase since the last strategy report, ranking 16th among 31 industries [4] - The dynamic price-to-earnings ratio (PE) for the sector, excluding loss-making companies, is currently at 19.8 times based on the latest closing prices [4] Recommended Companies - The report suggests focusing on investment opportunities in the real estate sector, specifically recommending companies such as China Jinmao (00817), China Resources Land (01109), China Merchants Shekou (001979.SZ), Binjiang Group (002244.SZ), and Greentown China (03900) [1]