Sou Hu Cai Jing·2025-09-06 12:13Group 1: Market Overview - Both Goldman Sachs and Morgan Stanley agree that the real estate market is still in a downturn, with signs of improvement beginning to emerge [3][4] - Goldman Sachs estimates that there are over 60 million unsold homes in China, with a clearance period of 36 months, while Morgan Stanley highlights a structural oversupply that could meet the housing demand for urban populations over the next five years [3][4] - New home sales are projected to decline by 37.7% year-on-year in 2024, with some third and fourth-tier cities experiencing price drops exceeding 15% [3] Group 2: Policy Effectiveness - Despite a 1.5 percentage point reduction in interest rates by the central bank in 2024, leading to over 2 trillion yuan in long-term funds, new residential mortgage loans have shrunk by 42% compared to the previous year [4] - Goldman Sachs estimates that resolving the "guarantee delivery" and inventory issues would require 8 trillion yuan in fiscal investment, equivalent to 35% of the national fiscal revenue for 2024 [4] - Morgan Stanley points out that the effectiveness of infrastructure investment has decreased significantly, with only 0.2 yuan of GDP growth generated for every 1 yuan invested, a 60% drop in efficiency compared to a decade ago [4] Group 3: Urban Disparities - In the first quarter of 2025, 30 monitored cities showed an 18% increase in new home transactions year-on-year, while lower-tier cities saw a 12% decline [5] - Asset price changes reflect this disparity, with second-hand home prices in Beijing's Chaoyang District slightly increasing by 0.3%, while prices in a central provincial capital have fallen below 2019 levels [5] Group 4: Diverging Recovery Narratives - Goldman Sachs believes that an 8 trillion yuan stimulus plan could create a "policy bottom," projecting a potential recovery in housing prices by the end of 2025 and a sales scale returning to 12 trillion yuan by 2027, still 40% lower than the peak in 2021 [6] - Conversely, Morgan Stanley warns that large-scale stimulus could exacerbate structural imbalances, with the total market value of real estate to GDP ratio remaining at 350%, compared to 169% in the U.S., suggesting that any stimulus could lead to new bubbles [6] Group 5: Economic Dynamics - Goldman Sachs emphasizes the positive impact of manufacturing upgrades, noting a 48% year-on-year increase in exports of new energy vehicles and photovoltaic equipment, which offsets a 0.7 percentage point drag on GDP from declining real estate investment [11] - Morgan Stanley highlights the ongoing erosion of wealth effects, stating that a 1% drop in housing prices could suppress consumption growth by 0.3 percentage points, potentially continuing until 2028 [13] Group 6: Consumer Perspectives - Homebuyers face challenges, with first-time mortgage rates in Beijing dropping to 3.1%, yet average monthly payments consuming 62% of household income, exceeding the international warning line of 40% [14] - Developers are struggling, as evidenced by a promotional offer in Zhengzhou where buying a new home includes a parking space, reflecting a net profit margin below 2% [14] - Younger generations show a 23% decline in home-buying intentions, preferring to invest in vocational education and experiential consumption [14] Group 7: Future Strategies - In major cities like Beijing and Shanghai, mortgage rates have fallen below public fund loan rates, creating a rare opportunity for first-time homebuyers in the second half of 2025 [15] - The asset allocation paradigm is shifting, with real estate's share in household assets needing to decrease from 78% to below 50%, while alternative investments like REITs and affordable rental housing are gaining attention [15] - Awareness of risks is increasing, with a projected 34% debt default rate among the top 50 private real estate companies in 2024 [15]