Core Insights - The overall market in Q3 2025 shows weak transaction volume, continued price declines, and rising inventory levels, indicating ongoing de-stocking pressures [1] - Only 19% of the 27 first- and second-tier cities exhibit signs of market stabilization [1] Transaction Volume and Price Trends - The transaction volume for second-hand homes is stronger than that of new homes, with cities like Chengdu and Shanghai showing significant year-on-year recovery [1] - New home prices have seen a widening decline in Q3 2025, following a period of narrowing declines since October 2024, while second-hand home prices also reflect this trend [2] - The overall market recovery remains weak, with first-tier cities showing slight improvement while second-tier cities continue to experience negative growth in new home transactions [2] Inventory and Supply Dynamics - Inventory cycles are on the rise, with first-tier cities' clearing cycles increasing to 19.9-21.1 months, up from 16-17 months at the end of 2024 [3] - Second-tier cities face even higher inventory pressures, with clearing cycles reaching a three-year high of 24.8 months in September 2025, attributed to weak new home sales and structural issues like declining population attraction and excess land supply [3]

Core Viewpoint - The real estate market is experiencing a significant downturn, with declining prices and reduced buyer interest, leading to a prolonged inventory cycle and a shift in buyer demographics and motivations [1][3][6]. Group 1: Market Trends - The "golden September and October" sales season is witnessing a general decline in housing prices across over 70 major cities in China, including slight decreases of 0.6%-1% in Guangzhou and Shenzhen, and minimal increases of only 0.3% and 0.2% in Shanghai and Beijing respectively [3]. - From January to September this year, the total area of commercial housing sold nationwide decreased by 5.5%, and sales revenue fell by 7.9% compared to the previous year [3]. Group 2: Inventory and Demand - The inventory cycle for commercial housing in third and fourth-tier cities remains high at 47.6 months, significantly exceeding the reasonable and safe inventory cycle of 12 months [6]. - The ongoing decline in housing prices is accompanied by a continuous decrease in the number of buyers, indicating a lack of confidence in the market [6]. Group 3: Demographic Shifts - The urbanization process in China has reached its peak, resulting in a loss of a significant customer base, particularly rural migrants who previously contributed to housing demand [10]. - Population aging is becoming a critical factor, as the last wave of demographic dividends is fading, leading to a potential decline in first-time homebuyers among younger generations [12][16]. Group 4: Changing Buyer Perspectives - The perception of homeownership is shifting; younger buyers are now more rational and objective, focusing on actual needs and affordability rather than societal pressures [18]. - The decline in real estate prices is seen as a return to the fundamental purpose of housing, emphasizing its role as a home rather than an investment vehicle [18].

Group 1 - National statistics indicate that from January to September, the sales area of new commercial housing nationwide was approximately 6.58 billion square meters, a year-on-year decrease of 5.5%, with the decline rate expanding by 0.8 percentage points compared to January to August [2] - The sales revenue for new commercial housing in the first three quarters was about 6.3 trillion yuan, a year-on-year decrease of 7.9%, with the decline rate also expanding by 0.6 percentage points compared to January to August [2] - As of the end of September, the unsold area of commercial housing nationwide was 75.928 million square meters, a decrease of 2.41 million square meters from the end of August, indicating a slight improvement in inventory levels [2] Group 2 - The construction area of real estate development enterprises from January to September was approximately 6.486 billion square meters, a year-on-year decrease of 9.4% [4] - The new construction area was about 4.54 million square meters, down 18.9%, although the decline rate narrowed by 0.6 percentage points compared to January to August [4] - Real estate development investment totaled 67.706 billion yuan, a year-on-year decrease of 13.9%, with residential investment at 52.046 billion yuan, down 12.9% [4] Group 3 - The narrowing decline in new construction is attributed to better market absorption of quality housing products and stable land sales in key regions such as the Yangtze River Delta and Pearl River Delta [5] - Major state-owned enterprises have increased their market share, with four leading state-owned enterprises accounting for 25.29% of the total sales of the top 100 real estate companies [5] - The pressure on funding for real estate companies remains, with total funds available decreasing by 8.4% year-on-year to 72.299 billion yuan [5] Group 4 - The industry expects that stabilizing market expectations will be key to halting the decline, with policies likely to accelerate implementation in the fourth quarter [7] - In major cities, the transaction volume of second-hand housing has shown signs of recovery, although the "price for volume" strategy is expected to persist in the short term [7] - The overall market is anticipated to continue focusing on depleting existing inventory, with new supply in core cities expected to support new home sales [7]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the economic situation in China post the Fourth Plenary Session, highlighting challenges such as persistent deflation and a weakening fiscal impulse affecting infrastructure investment [5][9][13]. Core Economic Insights - **GDP Growth**: The actual GDP growth rate for the year is expected to reach 4.8%, with a decline anticipated in the second half of the year [5]. - **Deflation**: The economy is struggling with persistent deflation, with nominal GDP growth weakening, which in turn affects wage growth [13][14]. - **Fiscal Pulse**: Since August, the fiscal pulse has weakened, leading to a rapid decline in infrastructure investment [9]. Investment and Consumption Trends - **Consumer Behavior**: There is a notable decline in retail sales growth, particularly in housing-related consumption and automobiles, indicating a shift in consumer spending patterns [15]. - **High Savings Rate**: China's high savings rate reflects deep structural imbalances in the economy, with excess savings estimated at around 30 trillion RMB [52][54]. Policy Measures and Economic Reforms - **Fiscal Stimulus**: A fiscal stimulus plan of 10 trillion RMB is expected to be introduced over the next two years, focusing on consumption [23]. - **Social Welfare Improvements**: Initiatives include national birth subsidies and free preschool education, aimed at improving social welfare and boosting consumption [26][36]. - **Rebalancing the Economy**: The report emphasizes the need for the economy to rebalance towards consumption, with social security reform being a key component [33][36]. Real Estate Market Dynamics - **Real Estate Adjustments**: The real estate sector is still in a phase of adjustment, with new construction volume stabilizing but price adjustments remaining unclear [47]. - **Inventory Management**: It is estimated that around 3 trillion RMB will be needed to reduce new housing inventory to healthy levels [50]. Technological Advancements and Future Outlook - **AI and Innovation**: The report highlights the potential of AI and emerging technologies to drive investment and economic growth, with significant government support for tech innovation [94][99]. - **Long-term Projections**: By 2050, the cumulative application scale of humanoid robots is projected to reach 1 billion units, with approximately 30% expected to come from China [112]. Additional Insights - **Youth Unemployment**: The youth unemployment rate remains high, reflecting broader economic pressures and challenges in the labor market [18][20]. - **Structural Challenges**: The report notes that the social security system in China is still inadequate, with significant disparities between urban and rural areas [40][42]. This summary encapsulates the critical insights and projections regarding China's economic landscape, highlighting both challenges and opportunities for investment and growth.

Core Viewpoint - The real estate market is showing signs of stabilization and recovery, supported by various policies aimed at promoting housing demand and improving market conditions [1][2][3] Group 1: Market Performance - In the first eight months of the year, the sales area of new commercial housing decreased by 4.7% year-on-year, a reduction of 13.3 percentage points compared to the same period last year [1] - The sales revenue of commercial housing fell by 7.3%, with a decrease of 16.3 percentage points compared to the previous year [1] - The decline in new residential prices is narrowing, with first, second, and third-tier cities showing reductions of 0.2, 0.4, and 0.5 percentage points respectively in August [1] Group 2: Financial and Inventory Improvements - From January to August, the funds available to real estate developers decreased by 8%, but this decline is 12.2 percentage points less than the same period last year [2] - The inventory of commercial housing has been decreasing for six consecutive months, with a reduction of 3.17 million square meters from July to August [2] - The supply-demand balance in the real estate market is improving, with local governments reducing new land supply to prevent further imbalance [2] Group 3: Future Market Potential - Urbanization in China continues, with a housing stock of approximately 35 billion square meters, leading to an annual demand for about 700 million square meters of new construction [2] - There is a growing demand for "good houses," as urban development shifts from expansion to quality improvement, which will stimulate further demand [3] - The risk for real estate companies is gradually decreasing, with significant progress in debt restructuring for troubled firms, indicating a recovery in the industry [3]

Investment Rating - The report maintains a "Buy" rating for the real estate development and service sectors [9][42]. Core Insights - Recent data indicates a month-on-month increase in both new and second-hand housing transactions, with new housing transaction area in 44 cities rising by 14% week-on-week [1][12]. - The inventory of new homes in 21 key cities has slightly decreased by 0.1% week-on-week, while the second-hand housing listings have increased by 0.1% compared to the previous week [1][35]. - The report highlights a recovery in transaction volumes and prices in key urban markets, suggesting potential valuation recovery for companies with resources in these areas [3]. Summary by Sections Market Overview - The Shanghai Composite Index fell by 0.44%, while the real estate development sector rose by 0.71% [2]. - The report notes a year-to-date decline of 6% in new housing transaction area across 44 cities, contrasting with a 14% increase in second-hand housing transactions [1][12]. Key Companies and Dynamics - Recommended companies include: - Chengjian Development (600266 CH) with a target price of 7.42 - Greentown China (3900 HK) with a target price of 13.69 - China Overseas Development (688 HK) with a target price of 19.08 - Chengdu Investment Holdings (600649 CH) with a target price of 6.40 - Greentown Services (2869 HK) with a target price of 6.56 - Wanwu Cloud (2602 HK) with a target price of 32.29 - Link REIT (823 HK) with a target price of 50.59 - Jianfa International Group (1908 HK) with a target price of 21.60 - China Resources Land (1109 HK) with a target price of 36.45 - New Town Holdings (601155 CH) with a target price of 18.05 - China Resources Mixc Life (1209 HK) with a target price of 46.60 [3][42]. Inventory and Sales Trends - As of September 14, the inventory of new homes in 21 cities has decreased by 0.1% week-on-week, with a year-on-year decline of 13% [32]. - The second-hand housing listings in 20 sample cities have increased to approximately 2.484 million units, up 0.1% from the previous week and 8.7% from the end of last year [35][1]. Performance Metrics - The report indicates that the new housing sales area in 44 cities has shown a year-on-year increase of 8% from September 1 to 19, with first-tier cities seeing a 22% increase [12]. - The second-hand housing sales area in 22 cities has increased by 26% year-on-year, with first-tier cities up 35% [22].

Group 1: Consumer Market Trends - Consumer spending continues to expand and improve, with retail sales of consumer goods increasing by 4.6% year-on-year from January to August, and a 3.4% increase in August alone [1] - The "trade-in for new" policy has shown positive effects, with retail sales of furniture, home appliances, and communication equipment increasing by 18.6%, 14.3%, and 7.3% respectively in August [1] - Service consumption is growing rapidly, with service retail sales increasing by 5.1% year-on-year from January to August, outpacing the growth of goods retail sales [1][2] Group 2: Real Estate Market Developments - The decline in new housing sales has narrowed, with a 4.7% year-on-year decrease in sales area from January to August, a reduction of 13.3 percentage points compared to the same period last year [3] - New home prices are also seeing a reduced decline, with most cities experiencing a smaller year-on-year price drop in August compared to July [3] - The inventory reduction in the real estate market is progressing steadily, with a decrease of 3.17 million square meters in unsold housing inventory from July to August [3] Group 3: Macroeconomic Policy Outlook - Overall, macroeconomic policies are expected to strengthen, with potential new measures aimed at stabilizing employment, businesses, and market expectations [4][5] - Analysts suggest that new fiscal measures and possible interest rate cuts from the central bank may be introduced in the fourth quarter to counter external demand slowdowns [4]

9月15日，国新办召开新闻发布会，国家统计局新闻发言人、总经济师、国民经济综合统计司司长付凌晖在会上表示，受国内外 形势变化影响，前8个月房地产市场虽有所波动，但商品房销售和住宅价格同比降幅在收窄，去库存成效继续显现，房地产市场 仍朝着止跌回稳方向迈进。 商品房待售面积连续6个月减少 8月70个大中城市中，多数城市商品住宅销售价格同比降幅有所收窄，其中一、二、三线城市新建商品住宅销售价格同比降幅比 上月分别收窄0.2、0.4和0.5个百分点；二、三线城市二手住宅销售价格同比降幅均收窄0.4个百分点。 环比看，各线城市商品住宅销售价格下降态势仍未扭转，但部分城市出现环比降幅收窄情况。 比如在新房市场，8月一线城市新房价格环比下降0.1%，降幅比上月收窄0.1个百分点，其中，上海上涨0.4%，北京、广州和深 圳分别下降0.4%、0.2%和0.4%。二线城市新建商品住宅销售价格环比下降0.3%，降幅收窄0.1个百分点。 前8月房地产市场呈现市场销售降幅收窄，新房价格环比上涨城市增加、同比降幅收窄等积极信号。 9月15日，国家统计局公布前8月房地产数据。1-8月，全国新建商品房销售面积同比下降4.7%，降幅比去年同期 ...

21世纪经济报道记者李莎 北京报道 前8月房地产市场呈现市场销售降幅收窄，新房价格环比上涨城市增加、同比降幅收窄等积 极信号。 9月15日，国家统计局公布前8月房地产数据。1-8月，全国新建商品房销售面积同比下降4.7%，降幅比去年同期收窄13.3个百分 点，比去年全年收窄8.2个百分点。商品房销售额下降7.3%，降幅比去年同期收窄16.3个百分点，比去年全年收窄9.8个百分点。 在房价方面，8月70个大中城市中，上海、杭州、沈阳、合肥、南宁、西宁、乌鲁木齐、吉林、宜昌这9个城市新房价格环比上 涨，上涨城市数量较7月增加3个。同时，70城中多数城市商品住宅销售价格同比降幅有所收窄。 9月15日，国新办召开新闻发布会，国家统计局新闻发言人、总经济师、国民经济综合统计司司长付凌晖在会上表示，受国内外 形势变化影响，前8个月房地产市场虽有所波动，但商品房销售和住宅价格同比降幅在收窄，去库存成效继续显现，房地产市场 仍朝着止跌回稳方向迈进。 商品房待售面积连续6个月减少 比如在新房市场，8月一线城市新房价格环比下降0.1%，降幅比上月收窄0.1个百分点，其中，上海上涨0.4%，北京、广州和深 圳分别下降0.4%、0. ...

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the **Chinese economy** and its current challenges, particularly focusing on the economic performance in July 2025 and projections for the remainder of the year [1][21]. Core Insights and Arguments 1. **Economic Slowdown**: In July, domestic growth momentum weakened significantly, with retail sales growth slowing to **3.7%** year-on-year, below market expectations [1][5]. 2. **Investment Decline**: Overall fixed asset investment decreased by **5.2%** year-on-year, with both infrastructure and manufacturing investments declining [1][10]. 3. **Real Estate Market**: Real estate activities continued to decline, with sales down **7.8%** year-on-year and new construction area down **15.4%** [6][26]. 4. **Industrial Production**: Industrial production growth fell to **5.7%** year-on-year, indicating a slowdown in manufacturing output [1][12]. 5. **Export Recovery**: Despite a decline in exports to the US, overall export growth improved to **7.2%** year-on-year, supported by lower base effects [1][11]. 6. **Inflation Metrics**: The Consumer Price Index (CPI) growth rate fell to **0%**, while the Producer Price Index (PPI) dropped by **3.6%** year-on-year [1][17]. 7. **Credit Market**: July saw a contraction in new RMB loans for the first time in 20 years, with a reduction of **500 billion RMB**, indicating weak credit demand [1][18]. Additional Important Insights 1. **Policy Measures**: The government has introduced several support measures, including childcare subsidies and consumer loan interest subsidies, but the scale of these measures is expected to be moderate [3][32]. 2. **Future Challenges**: The economic outlook remains cautious, with expectations of continued challenges in the real estate sector and consumer spending due to weak income growth and consumer confidence [2][27]. 3. **Trade Relations**: Ongoing US-China trade negotiations are expected to prolong tariff uncertainties, which may negatively impact export growth in the coming months [22][24]. 4. **Government Stimulus**: Potential fiscal stimulus measures may be introduced in Q3 or Q4, depending on economic data trends, with a baseline GDP growth forecast of **4.7%** for 2025 [3][32]. This summary encapsulates the key points discussed in the conference call, highlighting the current state of the Chinese economy, the challenges it faces, and the government's response to these challenges.