Zhi Tong Cai Jing·2026-01-06 03:03Core Viewpoint - Morgan Stanley reports that second-hand housing prices in major mainland cities continued to decline month-on-month in December last year, but the rate of decline has slowed. The year-on-year sales decline has also moderated during the same period [1] Group 1: Housing Market Trends - The firm anticipates that housing policies may remain low-key in the coming months, while high levels of second-hand housing listings could suppress buyer sentiment, putting pressure on sales and prices [1] - Morgan Stanley maintains its view that as consumer confidence further weakens, the downward trend in the real estate market is expected to continue this year, albeit at a slower pace. The expected year-on-year decline in second-hand housing prices is projected to be in the high single digits, compared to a 13.7% decline in 2025 [1] - If the macro environment remains resilient, housing prices in first-tier and major second-tier cities may stabilize in the second half of 2027 [1] Group 2: Company Performance and Investment Opportunities - Despite a cautious outlook on the recovery of the real estate market, Morgan Stanley foresees a further divergence in stock performance between the overall industry and high-quality companies with reliable self-rescue capabilities this year [1] - The firm is optimistic about robust mall operators such as China Resources Land (01109) and New City Holdings (601155), believing they will benefit from the emphasis on consumption in the 14th Five-Year Plan and strong tailwinds from REITs policies [1] - Morgan Stanley also favors C&D International Group (01908) and China Overseas Development (00688), as their optimized land reserves will support profits and drive a return to positive earnings growth [1]