Core Viewpoint - In May, the supply of new residential properties in 28 key cities experienced a significant decline, with a year-on-year decrease of 39%, indicating increasing constraints on supply [2][12]. Supply Overview - The overall supply volume in May was 5.67 million square meters, down 36% month-on-month and 39% year-on-year, with a cumulative year-on-year decline of 24% for the first five months [2][12]. - Major cities like Shanghai, Shenzhen, and Chengdu saw substantial supply reductions, with Shanghai and Shenzhen experiencing near stagnation in new supply [3][12]. City-Level Analysis - First-tier cities showed a steady decline, with a month-on-month drop exceeding 40%. Beijing's supply remained stable compared to last year, while Shanghai and Shenzhen's supply fell below 200,000 square meters [3][6]. - Second-tier cities experienced a slight decline, with a month-on-month decrease of 28% and a year-on-year decrease of 37%. Cities like Ningbo and Kunming saw temporary increases in supply [3][12]. - Third and fourth-tier cities faced a complete contraction in supply, with some cities reporting zero new supply, indicating a "passive clearance" phase in the market [3][12]. Supply Structure - The supply structure in key cities is primarily focused on improvement needs, with 37% for basic needs, 47% for improvement, and 16% for high-end properties [6][9]. - More than half of the cities have their main supply concentrated in urban areas, with a significant focus on improvement products [6][9]. Market Outlook - The expectation for the market is a "quality improvement" in supply, which may support a slight increase in transaction volumes in May, with a likely month-on-month increase and year-on-year stability [12][13]. - The average absorption rate for projects in 28 key cities is projected to be 31%, reflecting a month-on-month decrease of 8 percentage points but stable compared to last year [12][13].

Group 1 - The report highlights strong economic growth in the first quarter, with GDP growth reaching 5.4%, surpassing the previous consensus expectation of 5.2% [2] - Investment in manufacturing and infrastructure remains steady, while real estate investment showed signs of slowing down in March, although property sales continue to recover [2][3] - Consumer spending has improved significantly, particularly in March, with online retail showing high growth, indicating the effectiveness of policies promoting consumption [2] Group 2 - The report indicates that the current domestic inventory cycle is in a weak replenishment phase, with leading indicators suggesting steady recovery in consumer spending and business expectations [2] - The uncertainty surrounding tariffs is expected to suppress commercial activities and asset price expectations, leading to increased volatility in risk assets [2] - The report suggests that Chinese assets have relative advantages, with A-shares entering an observation period, and emphasizes the importance of domestic policy strength and timing for sustaining recovery momentum [2] Group 3 - The report notes that the weak dollar trend is likely to continue, with rising risks of a slowdown in the US economy, which may lead to increased demand for gold as a safe-haven asset [2] - The report emphasizes that low valuations and stable earnings will dominate market styles before the implementation of growth-stabilizing policies, with a focus on defensive assets in the short term [2] - The report anticipates that after the uncertainty surrounding tariffs is resolved, profit factors may regain dominance in the market, shifting focus back to growth-oriented sectors [2]