Core Insights - The high-end new housing projects in Shanghai remain popular, while the second-hand housing market has rebounded to over 20,000 transactions [1][4] Economic Performance - In the first three quarters of 2023, Shanghai's economy showed a stable and improving trend, with real estate development investment increasing by 2.2% year-on-year [2] - The total construction area for commercial housing reached 155.91 million square meters, a slight increase of 0.1%, while residential construction area grew by 0.9% to 72.37 million square meters [2] Sales Performance - The sales area of commercial housing decreased by 0.3% to 12.02 million square meters, with residential sales down by 3.8% to 9.57 million square meters [3] - However, the decline in sales area has narrowed compared to previous months, indicating the effectiveness of the "Six Policies" released on August 25 [3] Policy Impact - The "Six Policies" include adjustments to housing purchase restrictions, housing provident fund, housing credit, and housing tax, which have positively impacted the market [3] - The policies allow eligible families to purchase unlimited properties outside the outer ring of Shanghai, while single adults are subject to the same restrictions as families [3] Market Activity - The "Golden September and Silver October" period has shown strong performance, with high-end residential projects selling out quickly, such as the Jinling Huating project with a total value exceeding 9.8 billion yuan [4] - The second-hand housing market saw 20,389 transactions in September, marking a return to the 20,000 transaction level [4] Land Market - The recent land auction in Shanghai set a record for the highest land price in the city's riverside area at 14.85 million yuan per square meter, indicating strong land value [4] - The total revenue from the eighth batch of land sales approached 19.8 billion yuan, reflecting the resilience of land value in Shanghai [4]

Investment Rating - The report rates the real estate industry as "Outperforming the Market" [1] Core Viewpoints - In September, both new and second-hand housing transaction volumes turned positive on a month-on-month and year-on-year basis, driven by seasonal factors and new policies in first-tier cities [4][20] - The land auction market showed a decline in heat, with a notable drop in average land premium rates, although first-tier cities still maintained premiums above 10% [4][20] - The report highlights a significant increase in the sales and land acquisition of top real estate companies, indicating a recovery in the sector [4][20] Summary by Sections New Housing Transactions - In September, new housing transaction area in 40 cities reached 935.4 million square meters, with a month-on-month increase of 9.0% and a year-on-year increase of 0.7% [12][14] - First-tier cities saw a month-on-month increase of 22.7% and a year-on-year increase of 9.9% in new housing transactions [13][16] - Second-tier cities experienced a month-on-month increase of 9.2% and a year-on-year increase of 0.8% [13][16] Second-hand Housing Transactions - In September, second-hand housing transaction area in 18 cities reached 758.6 million square meters, with a month-on-month increase of 6.0% and a year-on-year increase of 9.4% [20][23] - First and second-tier cities showed positive year-on-year growth in second-hand housing transactions, while third and fourth-tier cities experienced a decline [21][25] Inventory and Absorption - As of the end of September, the inventory of new homes in 12 tracked cities increased by 2.0% month-on-month but decreased by 12.7% year-on-year, with an overall absorption period of 18.9 months [4][12] - The average opening absorption rate in September was 39%, indicating a slight decline but remaining at a high level for the year [4][20] Land Market - The overall land auction heat declined in September, with a national average land premium rate of 3.3%, down 0.8 percentage points month-on-month [4][20] - The total land transaction area in September increased by 19.5% month-on-month but decreased by 9.1% year-on-year [4][20] Real Estate Companies - In September, the top 100 real estate companies saw a year-on-year increase of 0.3% in equity sales, with a total sales amount of 2.49 trillion yuan, down 12.8% year-on-year [4][20] - The land acquisition amount for the top 100 companies in September increased by 184.2% year-on-year, indicating strong market activity [4][20] Policy Environment - The Ministry of Natural Resources encouraged market-oriented methods to revitalize idle land, while first-tier cities continued to optimize real estate policies [4][20] - Specific policy adjustments in cities like Shenzhen and Shanghai aimed to ease purchasing restrictions and improve financing conditions [4][20] Investment Recommendations - The report suggests focusing on companies with stable fundamentals in core cities, smaller firms with significant breakthroughs, and those benefiting from the recovery in the second-hand housing market [4][20]

Investment Rating - The industry investment rating is "Outperform the Market" [4][24]. Core Insights - In September 2025, new home prices in 70 major cities decreased by 0.4% month-on-month, while second-hand home prices fell by 0.6%. This marks a significant increase in the decline of new home prices compared to August [4]. - The number of cities with declining new home prices increased to 63, with an average decline of 0.47%, which is a 0.06 percentage point increase from August. All 70 cities experienced a decline in second-hand home prices, with an average drop of 0.64% [4]. - First-tier cities saw a month-on-month decline in new home prices of 0.3%, while second-hand home prices remained stable. The decline in second-hand home prices in first-tier cities was notably greater than in second and third-tier cities [4]. - The report suggests that the current housing market is under continuous downward pressure, with significant challenges in inventory reduction and weak consumer confidence. The market anticipates potential policy interventions [4]. Summary by Sections New Home Prices - In September, new home prices in first-tier cities decreased by 0.3%, while second-tier cities saw a decline of 0.4%. Third-tier cities also experienced a 0.4% drop [4][8]. - Only 10% of second-tier cities reported stable or increasing new home prices, with Hangzhou and Changchun showing slight increases [4]. Second-Hand Home Prices - All 70 cities reported a decline in second-hand home prices, with first-tier cities experiencing a 1.0% drop, second-tier cities a 0.7% drop, and third-tier cities a 0.6% drop [4][15]. - The report highlights that the decline in second-hand home prices in first-tier cities has been greater than in lower-tier cities for five consecutive months [4]. Investment Opportunities - The report recommends focusing on four main lines of investment: 1. Companies with stable fundamentals and high market share in core cities, such as Binjiang Group and China Resources Land [4]. 2. Smaller companies that have made significant breakthroughs in sales and land acquisition since 2024, like Poly Real Estate Group [4]. 3. Companies undergoing operational or strategic changes, such as New Town Holdings and Longfor Group [4]. 4. Real estate brokerage firms benefiting from the recovery in the second-hand housing market, including Beike-W and Wo Ai Wo Jia [4].

Market Overview - In September, the number of new housing projects for sale in 60 monitored cities increased by 1.7% month-on-month, showing a pattern of "third and fourth-tier cities leading, with first and second-tier cities diverging" [1][14] - The online housing search heat index for new homes in these cities was 54.1, a year-on-year decrease of 12.9%, indicating a continued adjustment in market demand [1][19] Price Trends - The average online asking price for new homes in the 60 cities was 19,653 yuan per square meter, with a slight month-on-month increase of 1.4% [2][26] - Among these cities, 41 saw price increases, 2 remained stable, and 17 experienced price declines [2][26] Policy Developments Central Government Policies - In September 2025, real estate policies focused on coordinated efforts across multiple departments, emphasizing precise regulation and long-term development [3][7] - Key initiatives included land management reforms and pilot programs for market-oriented resource allocation [4][6] Local Government Policies - Local policies showed a trend of relaxation in purchase restrictions, with cities like Shenzhen significantly easing limits [9][11] - Various regions introduced targeted subsidies for homebuyers, including fixed amount subsidies and incentives for specific demographics [9][12] - Optimizations in housing provident fund policies were noted, with increases in loan limits and expanded eligibility for fund withdrawals [9][12] New Housing Market Trends Supply and Demand Dynamics - The number of new homes available for sale reversed a previous downward trend, with a month-on-month increase of 1.7% in September [14] - The number of pending new homes increased by 18.8% month-on-month, attributed to a surge in supply during the "golden September" period [17] Search Heat Index by City Tier - The search heat index showed a divergence among city tiers, with new first-tier cities at 59.6, first-tier at 58.8, second-tier at 53.6, and third and fourth-tier at 48.6 [19][21] Price Movements by City Tier - The average asking price changes varied by city tier, with second-tier cities seeing a 2.0% increase, new first-tier cities at 1.4%, and first-tier cities at 0.3% [28][29]

Core Insights - The Chinese real estate market is experiencing a significant downturn, with a 13.1% year-on-year decline in sales for the top 100 real estate companies, totaling 52,977 billion yuan in the first ten months of the year [1] - The proportion of real estate in Chinese households' total assets is remarkably high at 77%, indicating a heavy reliance on property as a means of wealth preservation and appreciation [1] Group 1: Long-term Price Decline - Since the second half of 2021, the Chinese real estate market has entered an adjustment period due to slowing national income growth and ongoing regulatory policies, leading to price declines spreading from lower-tier cities to major cities like Beijing and Shanghai [6] - The myth that housing prices in first-tier cities would not decline has been broken, with future price trends likely to stabilize with a downward bias [6] Group 2: Increased Difficulty in Property Liquidation - There has been a significant increase in the number of second-hand homes listed for sale, with 1.99 million units in 13 key cities by June, a 25% increase since the beginning of the year [7] - This surge in listings reflects a pessimistic market outlook among speculators, indicating that substantial price reductions of 30% to 50% may be necessary to facilitate transactions [7] Group 3: Rising Holding Costs - Households with multiple properties face significantly higher monthly mortgage payments compared to those with a single property, exacerbated by income reductions and job losses post-pandemic [8] - Additional costs such as property management and heating fees are also increasing, adding to the financial burden on these households [8]

Group 1 - The core observation is that the recent National Day and Mid-Autumn Festival holiday revealed a shift in consumer behavior, with a notable decline in traditional spending on hotels and movies, reflecting broader economic challenges [2][8] - The total box office for the National Day holiday in 2025 was 18.35 billion yuan, marking a 14% year-on-year decline despite an additional day of holiday [2][7] - Domestic travel during the holiday reached 8.88 billion trips, with total spending of 809 billion yuan, resulting in a daily per capita consumption of 113.9 yuan, down 13% year-on-year [2][5] Group 2 - The underlying logic for the decline in movie box office is attributed to insufficient investment in the film industry and inadequate production capacity [2][5] - The shift in consumer spending habits, such as opting for camping over hotel stays, is linked to reduced income and rising prices in tourist areas, making traditional options less appealing [2][5] - The correlation between the peaks in movie box office and real estate sales over the past decade indicates that the real estate sector has been a significant driver of economic activity [6][8] Group 3 - In the real estate sector, new home sales during the holiday period showed significant activity, with reports of high visitor numbers and substantial sales in cities like Beijing, Guangzhou, and Shenzhen [9][12][14] - Beijing recorded a total of 418 new residential contracts during the holiday, while Guangzhou saw a 394% increase in new home purchases compared to the previous year [10][12] - The disparity between new and second-hand home sales is evident, with new homes performing well while second-hand transactions have significantly decreased [17][18]

Core Viewpoint - The prediction made by Jack Ma in 2017 about housing prices becoming as cheap as onions is increasingly becoming a reality, as housing prices in China have significantly declined since 2022, with some areas experiencing drops of over 60% [3][5]. Group 1: Current Market Trends - Since 2022, the domestic housing market has entered a long-term adjustment phase, with an average price drop of over 30% compared to historical highs [3]. - In certain third and fourth-tier cities, housing prices have fallen to extremely low levels, with some properties available for just tens of thousands of yuan [3]. - The real estate market is expected to undergo significant changes by 2026, with increased regulatory measures anticipated [5]. Group 2: Regulatory Changes - The regulatory environment for real estate is expected to tighten further, with potential reductions in mortgage rates and increases in public housing loan limits to encourage home purchases [5]. - Tax relief measures, including reductions in deed tax and value-added tax, are also likely to be implemented to support the market [5]. Group 3: Price Differentiation - A clear differentiation in housing prices across regions is anticipated, with cities that have already seen significant price drops having limited further decline potential [7]. - Major cities like Shanghai and Shenzhen, which still have high price-to-income ratios, are expected to experience a correction, starting with suburban areas before affecting city centers [7]. Group 4: Shift from Off-Plan to Completed Properties - Due to recent financial issues faced by major real estate companies, there is a growing demand to eliminate off-plan sales, leading to a shift towards selling completed properties [9]. - This change allows buyers to inspect properties before purchase, enhancing consumer confidence in the market [9]. Group 5: Elimination of Shared Area Costs - An increasing number of cities are abolishing the shared area cost in property pricing, allowing buyers to pay based on usable area only, which is positively received by the public [10][11]. - The trend of eliminating shared area costs is expected to continue, reducing the financial burden on homebuyers [10].

Investment Rating - The report rates the real estate industry as "Outperform" [1] Core Viewpoints - The new housing transaction volume has shown a mixed trend, with new housing sales area increasing month-on-month but declining year-on-year, while second-hand housing transactions have improved slightly [3][6] - The Shanghai "Good House" standard has been implemented, which is expected to enhance the quality of new housing products and improve living experiences for buyers [3] - The overall market remains under pressure due to declining prices, rising inventory, and weak consumer confidence, despite some signs of recovery in transaction volumes [7] Summary by Sections 1. Key City New Housing Market, Second-hand Housing Market, and Inventory Tracking - In the week of September 20-26, new housing transaction volume in 40 cities was 21,000 units, a month-on-month increase of 11.6% but a year-on-year decrease of 9.0% [16][18] - The new housing sales area was 2.299 million square meters, with a month-on-month increase of 23.0% and a year-on-year decrease of 7.7% [25][17] - The inventory of new housing in 12 cities was 11,434 million square meters, with a month-on-month increase of 0.7% and a year-on-year decrease of 12.7% [41][47] 2. Land Market Tracking - The total land transaction area across 100 cities was 1,761.6 million square meters, with a month-on-month increase of 57.2% and a year-on-year increase of 41.8% [61][67] - The total land transaction price was 44.71 billion yuan, with a month-on-month increase of 210.7% and a year-on-year increase of 43.5% [63][67] - The average land price was 2,538.2 yuan per square meter, with a month-on-month increase of 97.6% and a year-on-year increase of 1.2% [62][67] 3. Policy Overview - The report highlights the implementation of new policies aimed at improving housing quality and stabilizing the real estate market, particularly in major cities like Shanghai [3][4] 4. Company Performance Review - The report suggests focusing on companies with stable fundamentals and high market share in core cities, as well as those that have shown significant breakthroughs in sales and land acquisition since 2024 [7]

Core Viewpoint - The article discusses the critical state of China's real estate market and the implications for the macro economy, emphasizing the need for a shift in policy and perception regarding housing prices and land finance [2][4]. Group 1: Land Finance and Policy - Land finance is defined as the fiscal mechanism of local governments that possess land transfer and planning rights [4]. - To stabilize the real estate market, it is essential to abandon quantity targets and halt the influx of new land supply, focusing instead on redeeming excess properties [4]. - The current approach of relying on land sales for financing contradicts the central government's strategy of transitioning from incremental expansion to qualitative improvement [4]. Group 2: Impact of Housing Prices - The decline in housing prices primarily affects ordinary citizens rather than the wealthy, as housing constitutes a significant portion of household assets in China [4]. - The homeownership rates are notably high, with urban residents at 96.3% and rural residents at 94.8%, indicating that housing is a critical asset for the majority [4]. - The article argues that rising housing prices can help reduce wealth inequality, contrary to the belief that falling prices benefit the majority [4]. Group 3: Market Structure and Transformation - A dual-track system is proposed, distinguishing between market-driven housing and affordable housing, to ensure both price stability and housing accessibility [5]. - The article suggests that the best source of affordable housing is not new construction but rather the repurchase of excess market housing [5]. - The handling of unfinished projects should focus on rescuing banks rather than merely saving companies [5]. Group 4: Current Market Conditions - The real estate sector is currently in a downturn, with significant declines in new housing sales and investment [7][9]. - From January to August 2023, new housing sales dropped by 4.7% in area and 7.3% in value, while real estate development investment fell by 12.9% [7][9]. - The inventory of unsold properties has increased, with a notable rise in the waiting period for inventory clearance [10][13]. Group 5: Economic Contribution and Future Outlook - The real estate sector contributes approximately 20% to GDP and 40% to fiscal revenue, highlighting its importance to the economy [19][22]. - Despite its significance, the probability of housing prices continuing to rise is deemed low due to oversupply and demographic challenges [23][24]. - The article emphasizes that the real estate market must return to a supply-demand balance, as excessive price increases lead to unsustainable debt levels for developers [28][31].

Core Insights - The introduction of the "Six Policies" in Shanghai aims to stimulate the real estate market by relaxing housing purchase restrictions and optimizing housing fund policies, leading to increased activity in the housing market [1][4] - The implementation of the first Housing Rental Regulation addresses common issues in the rental market, such as false listings and deposit disputes, providing a legal framework for rental agreements [6][8] Group 1: "Six Policies" Impact - The "Six Policies" allow eligible residents to purchase an unlimited number of homes outside Shanghai's outer ring, which is expected to accelerate the absorption of properties in the peripheral market [1][3] - There has been a noticeable increase in inquiries and transactions for properties outside the outer ring, with browsing volume up by 22% and consultation volume up by 26% following the policy announcement [4][3] - The new housing fund policies include a 15% increase in the maximum loan amount for purchasing green buildings, with the first home loan limit raised from 1.6 million to 1.84 million yuan, and up to 2.16 million yuan for families with multiple children [4][6] Group 2: Housing Rental Regulation - The new Housing Rental Regulation sets clear requirements for rental properties, ensuring they meet safety and health standards, and prohibits the separate rental of non-residential spaces [6][7] - The regulation mandates that rental contracts be signed using real names and registered with local property management departments, which cannot charge fees for this service [6][8] - It addresses common issues such as unjustified deposit deductions and requires landlords to provide reasonable notice before terminating rental agreements, aiming to protect tenants' rights [7][8]