Seek .(US:SKLTY) Sou Hu Cai Jing·2025-10-26 12:14Core Viewpoint - The Chinese real estate market is experiencing a significant downturn, with average second-hand residential prices in major cities dropping to 13,691 yuan per square meter, a decrease of 0.75% month-on-month and 7.26% year-on-year, prompting various government interventions to stimulate the market [1] Group 1: Market Trends - The average price of second-hand residential properties in June fell to 13,691 yuan per square meter, reflecting a month-on-month decline of 0.75% and a year-on-year drop of 7.26% [1] - Government measures to stimulate the market include lowering mortgage rates to around 3% and reducing down payment ratios to 15%, with some first-tier cities lifting purchase restrictions entirely [1] - Predictions indicate that while first-tier cities may see a potential rebound in property values due to government support and strong demand, second and third-tier cities are expected to continue facing downward pressure [1][2] Group 2: Price Dynamics - The current housing price bubble is evident, with first-tier cities having a price-to-income ratio of 40 and second and third-tier cities ranging from 20 to 25, indicating a significant disconnect from local income levels [4] - The value of properties is quietly depreciating, particularly in first-tier cities where many properties valued at 3 million yuan are older and less resilient to price drops [4] - The myth that first-tier city prices will not decline has been shattered, as income growth has slowed significantly, reducing purchasing power [4][5] Group 3: Demographic Changes - First-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen are experiencing negative population growth, with outflows exceeding inflows, primarily due to high housing costs [5] - The declining attractiveness of first-tier cities due to rising living costs is expected to lead to a gradual return of property prices to levels that align with local income [5]