地产10月观察：价格止跌回稳的新常态

Investment Rating - The industry investment rating is "Overweight" for the real estate sector [4]. Core Insights - October marks a typical month post-new real estate policies, showing a trend of sales volume and price recovery, while investment continues to decline. This pattern is expected to persist into 2025, characterized by stabilized prices and accelerated inventory reduction by companies [2][4]. - Monthly sales have shown a near return to positive growth, with sales amount and area down by only -1.0% and -1.6% year-on-year, respectively. This performance is beneficial for real estate companies as it indicates a normalization in de-stocking speed and improved price expectations [4]. - Investment growth has further declined to -12.3%, with new construction area dropping by -26.7%. The report suggests that under strict control of new projects and land acquisition, companies will expedite balance sheet reduction, leading to a new normal of strong sales volume and price, but weak investment and construction [4]. - The main market concern is whether current policies can stabilize prices. The report believes this is achievable through measures like interest rate cuts and debt swaps, which can help address the mismatch in real estate companies' balance sheets [4]. - The report emphasizes a shift in focus from quantity to price, drawing on international experiences that show a weakening relationship between volume and price post-urbanization cycles. It suggests that the current demand reduction and price stabilization driven by economic growth are not contradictory [4]. - Attention should be given to asset injections and domestic debt restructuring over the next five years, with a focus on state-owned enterprises in Shanghai and companies like China Merchants Shekou, Poly Developments, and CIFI Holdings as potential beneficiaries [4]. Summary by Sections Sales and Investment Trends - Monthly sales have nearly returned to positive growth, with a year-on-year decline of -1.0% in sales amount and -1.6% in sales area, indicating a potential recovery in the market [4]. - Investment growth has decreased to -12.3%, with new construction area seeing a significant drop of -26.7% [4]. Policy Implications - Current policies aim to stabilize prices through interest rate reductions and debt restructuring, which are expected to mitigate the chain reaction caused by balance sheet mismatches in real estate companies [4]. - The report suggests that the focus should shift from quantity to price, as historical data indicates a decoupling of volume and price in real estate markets post-urbanization [4]. Recommended Companies - The report recommends focusing on state-owned enterprises in Shanghai and continues to endorse China Merchants Shekou, Poly Developments, and CIFI Holdings as key investment targets [4].