Core Viewpoint - The news highlights Guangzhou's proposal to cancel restrictions on home purchases, sales, and prices, signaling a shift towards a more relaxed real estate policy aimed at boosting consumer confidence and demand [1]. Group 1: Policy Changes - Guangzhou's Business Bureau has released a draft plan indicating the intention to gradually reduce consumption restrictions and optimize real estate policies, including the complete cancellation of purchase, sale, and price limits [1]. - The cancellation of these restrictions is not a new policy, as similar measures were already implemented in May and September 2024, with price limits effectively in place without formal documentation [1]. Group 2: Financial Adjustments - Current mortgage conditions in Guangzhou include a 15% down payment for both first and second homes, with a mortgage interest rate of 3% for commercial loans and 2.6% for public housing funds, indicating relatively low borrowing costs [1]. - There is potential for further reductions in the down payment ratio for public housing loans, which could enhance affordability for homebuyers [1]. Group 3: Urban Development Initiatives - The draft plan also emphasizes the importance of renovating urban villages and old residential areas, with a target to initiate over 150 old residential area renovations and update more than 9,000 old elevators by 2025, alongside a fixed asset investment of 100 billion yuan for urban village renovations [2]. - Accelerating urban village renovations is expected to stimulate housing demand, while utilizing special loans to purchase existing homes for resettlement purposes will help reduce inventory levels [2].

Investment Rating - The report maintains a "Positive" investment rating for the real estate industry [13]. Core Insights - The real estate sector is currently at a bottom range, with a significant downward trend in volume and price having likely passed. The industry is expected to see a policy trading window around mid-year, despite short-term policies not meeting market expectations [2][11]. - The adjustment phase of the industry has entered its second half, with the fastest decline in volume and price likely over. The core areas and quality properties present structural highlights [7][11]. - Continuous easing of industrial policies is anticipated, although the stabilization of the market remains fragile. The potential for further policy easing exists, including interest rate cuts and tax incentives [2][11]. Market Performance - The Yangtze River Real Estate Index decreased by 2.80% this week, with a year-to-date decline of 6.43%. The sector ranks low in performance relative to the broader market [8][16]. - In April, new home registrations in sample cities turned negative year-on-year, while second-hand home sales saw a decrease in growth rate [10][19]. Policy Developments - Recent policies include tax deductions for second-home loans transitioning to first-home loans, and various local governments have introduced new real estate measures to stimulate the market [9][18]. - Notable local policies include the introduction of housing vouchers in Nanjing and changes to housing fund regulations in Shanghai, aimed at increasing accessibility for non-residents [9][18]. Sales Data - In April, the new home transaction area in 37 cities saw a year-on-year decline of 7.5%, while second-hand homes experienced a year-on-year increase of 19.3% [10][19]. - The cumulative year-to-date transaction area for new homes in 37 cities is up by 0.9%, while second-hand homes have increased by 28.7% [10][19].