Bank of China Securities·2025-06-18 01:08Core Views - The real estate sector is experiencing a significant decline in sales area and investment, with May 2025 sales area at 70.53 million square meters, a year-on-year decrease of 3.3%, and investment amounting to 850.4 billion yuan, down 12.0% year-on-year [6][7][9] - The average selling price of residential properties has shown a slight increase month-on-month, with May's average price at 10,004 yuan per square meter, reflecting a 2.5% month-on-month growth, although it is down 2.8% year-on-year [7][8] - The inventory pressure remains high, with the current housing inventory accounting for nearly one-quarter of the total inventory, indicating ongoing challenges in the market [8][12] Real Estate Sales - The monthly sales area decline has intensified, with cumulative sales area and amount showing increased year-on-year declines. The sales amount for May was 705.6 billion yuan, down 6.0% year-on-year [7][9] - The average selling price of residential properties has decreased year-on-year but has shown month-on-month growth, indicating a mixed market response [7][8] - Regional differences are evident, with the central region showing a slight increase in sales area, while the eastern and western regions continue to experience declines [7][8] Real Estate Inventory - As of the end of May, the broad inventory of residential properties stood at 1.67 billion square meters, with a depletion cycle of 25.7 months, indicating a slow sales pace [8][12] - The current housing inventory (completed but unsold) is approximately 413 million square meters, with a depletion cycle of 20.0 months, reflecting ongoing challenges in sales [8][12] Real Estate Development Investment - Development investment has seen a year-on-year decline, with May's investment at 850.4 billion yuan, down 12.0% year-on-year, primarily due to ongoing pressure in construction and installation investments [9][10] - New construction area in May was 53.48 million square meters, down 19.3% year-on-year, indicating a continued slowdown in new projects [9][10] - The land investment market shows signs of slight recovery, which may support future investment and construction activities [9][10] Developer Financing - Developer financing has decreased, with total funds received in May at 763.6 billion yuan, down 10.1% year-on-year, indicating weakened sales and financing conditions [12] - Sales receipts have weakened significantly, with down payments and pre-sales also showing declines, reflecting a challenging market environment [12]