Core Insights - The real estate sector is experiencing significant pressure with high base growth rates leading to a decline in market performance [1] - The report maintains a "Buy" rating for the industry, indicating potential investment opportunities despite current challenges [2] Market Performance - In October 2025, the transaction volume of commodity residential properties in 46 cities decreased by 33.3% year-on-year, with a notable decline in first-tier cities at 39.1% [11][12] - The cumulative transaction volume from January to October 2025 shows a 10.9% year-on-year decrease [11] - The second-hand housing market also faced challenges, with transaction volumes in 11 cities down by 21.3% year-on-year [35] Market Sentiment - The second-hand housing prices fell by 1.7% month-on-month in October 2025, marking a total decline of 13.0% since the beginning of the year [5][35] - Inventory levels in the new housing market showed a slight decrease, with a 2.1% reduction in short-term inventory in 10 key cities [5] Policy Environment - The "14th Five-Year Plan" emphasizes promoting high-quality development in real estate, shifting from suppression to encouragement of reasonable demand [5][29] - The government is gradually lifting restrictive measures, which may positively impact market sentiment in the long term [5] Land Market Dynamics - In October 2025, the land transfer revenue in 600 cities dropped by 27.8% year-on-year, indicating a cooling land market [5] - The average land premium rate fell to 3.3%, the lowest since 2025, reflecting cautious bidding behavior among developers [5] Company Performance - The top 100 real estate companies reported a sales amount of 276.6 billion yuan in October 2025, a 41% year-on-year decline [29] - State-owned enterprises showed a year-on-year sales decline of 37%, while private enterprises faced a more severe drop of 52% [30] Investment Outlook - The SW Real Estate Index fell by 2.37% in October 2025, underperforming the broader market by 2.4 percentage points [5] - The report suggests holding quality real estate development companies, as the market is expected to stabilize and recover gradually [5]