Bank of China Securities·2025-12-30 00:30Investment Rating - The report rates the real estate industry as "Outperform the Market" [5] Core Insights - New home transaction area has seen a narrowing month-on-month increase but an expanding year-on-year decline, while second-hand home transaction area has turned positive month-on-month with a narrowing year-on-year decline [5][14] - The inventory of new homes has increased month-on-month but decreased year-on-year, with the de-stocking cycle lengthening both month-on-month and year-on-year [5][14] - The land market has experienced a decrease in transaction volume and a rise in prices, with both volume and price declining year-on-year [5][54] Summary by Sections 1. Key City New Home Market, Second-hand Home Market, and Inventory Tracking - In the week of December 20-26, 2025, new home transaction area in 40 cities was 2.74 million square meters, a month-on-month increase of 10.5% but a year-on-year decrease of 39.2% [15][20] - The inventory of new homes in 12 cities was 11,491 million square meters, with a month-on-month increase of 0.3% and a year-on-year decrease of 7.9% [32][33] - The de-stocking cycle for new homes in first, second, and third/fourth-tier cities was 19.8, 13.2, and 70.3 months respectively, with year-on-year increases across all tiers [25][35] 2. Land Market Tracking - Total land transaction area across 100 cities was 5,116.1 million square meters, a month-on-month decrease of 2.7% and a year-on-year decrease of 12.7% [54][58] - The total transaction price for land was 129.13 billion yuan, with a month-on-month increase of 10.0% but a year-on-year decrease of 15.9% [55][58] - The average floor price for land was 2,524.1 yuan per square meter, with a month-on-month increase of 13.0% but a year-on-year decrease of 3.7% [56][58] 3. Policy Overview - The central government emphasized the importance of the real estate sector in the upcoming "14th Five-Year Plan" period, indicating continued potential for growth and the need for policy adjustments to stabilize the market [90][91] - Local policies in Beijing have been adjusted to ease purchasing conditions for non-local households and support multi-child families, reflecting a trend towards more flexible housing policies [91][92] 4. Market Performance Review - The absolute return of the real estate sector was 1.9%, with a relative return of -0.04% compared to the CSI 300 index, indicating a slight improvement week-on-week [94][95] - The price-to-earnings ratio (PE) for the real estate sector was 24.68X, showing a week-on-week increase of 0.9X [98]