Core Viewpoint - The real estate market is experiencing a significant decline in second-hand housing prices, but the overall trend is shifting towards stabilization, with opportunities for potential buyers emerging in the latter half of 2025 [1][3][4]. Group 1: Market Trends - The second-hand housing prices in major cities have been declining both year-on-year and month-on-month, with "price for volume" being the prevailing market strategy [3]. - Chengdu leads in second-hand housing transactions with 19,214 units sold in June, followed by Shanghai with 18,028 units and Beijing with 15,139 units [3]. - Since July 2020, second-hand housing prices have reached a low point, and while further declines are expected, the pace of decline is anticipated to stabilize under current policy guidance [3][4]. Group 2: Buyer Insights - For potential homebuyers who have been waiting for years, the latter half of this year presents a favorable opportunity to purchase homes [4]. - The market is showing a significant divide, with 41.9% of the market consisting of homes priced below 3 million, while buyers of upgraded housing face considerable pressure due to lack of negotiation [7]. Group 3: Legal Auction Market - The volume of auctioned properties has increased, with 32,000 properties available in June, indicating sustained market confidence [9]. - Buyers are finding better deals in auctioned properties compared to regular second-hand homes, as these often sell below appraisal values, providing financial advantages [9]. - Caution is advised when participating in property auctions, and it is recommended to engage professional services for due diligence to avoid potential pitfalls [11].

Investment Rating - The industry investment rating is maintained as "Buy" [2][7][31] Core Insights - New home sales have slightly declined, while second-hand home transactions continue to grow, indicating a stronger market for second-hand properties compared to new homes [4][10][31] - The government is expected to implement policies to stabilize the real estate market, which may include easing restrictive measures and accelerating the acquisition of existing properties and idle land [7][31] Summary by Sections New and Second-Hand Housing Sales Data - In the week of March 3-9, new home sales in 30 major cities amounted to 1.47 million square meters, reflecting a month-on-month decrease of 33% and a year-on-year decrease of 7.6% [4][10] - Second-hand home sales in 13 cities reached 1.92 million square meters, showing a month-on-month increase of 2% and a year-on-year increase of 66% [4][10] Key City Transactions - **Shanghai**: Second-hand home daily average transactions reached 858 units, a year-on-year increase of 57% [5][15] - **Guangzhou**: Second-hand home transactions rose to 2,540 units, a year-on-year increase of 16% [6][20] - **Shenzhen**: Second-hand home daily average transactions were 199 units, a year-on-year increase of 54% [6][23] - **Beijing**: Second-hand home daily average transactions were 550 units, a year-on-year increase of 41% [6][28] Investment Recommendations - The report suggests focusing on leading real estate companies with low financial risks, strong land acquisition capabilities, and reasonable land reserves, as well as top second-hand housing intermediaries benefiting from active transactions [7][31]

Investment Rating - The report maintains an "Overweight" rating for the real estate development and service sectors [5]. Core Insights - The real estate sector is showing multiple positive signals, indicating that it has passed the "worst moment" with policies accelerating to stabilize the market. Concerns regarding falling housing prices, credit risks, and high inventory levels are being addressed [1][14]. - There is an expectation for structural stabilization in housing prices in 2025, with improvements in inventory issues due to "de-inventory" policies [1][14]. - The report highlights a recovery in transaction volumes for both new and second-hand homes, particularly in key cities, with significant year-on-year increases in sales areas [12][25]. Summary by Sections Market Overview - The Shanghai Composite Index fell by 2.22%, while the real estate development sector rose by 2.22%. The Hang Seng Index dropped by 2.29%, and the China Inner Housing Stock Index increased by 8.20% [2]. Key Companies and Dynamics - The report recommends focusing on key urban markets where transaction volumes and prices are expected to recover. Companies with strong cash flow and performance in these regions are likely to benefit from market stabilization. Key recommendations include: - Chengdu Investment Holdings (600649 CH) - Buy - Chengjian Development (600266 CH) - Buy - Binjiang Group (002244 CH) - Buy - China Merchants Shekou (001979 CH) - Buy - New Town Holdings (601155 CH) - Overweight [3][43]. Sales and Inventory Trends - From February 1 to 28, new home sales in 44 cities increased by 35% year-on-year, with first-tier cities seeing an 80% increase. The cumulative year-on-year increase for new home sales in these cities is 5% [16]. - Second-hand home sales in 22 cities rose by 102% year-on-year, with first-tier cities experiencing a 131% increase [25]. - Inventory levels in 21 cities showed a rolling four-week decline of 0% and a year-on-year decrease of 11% [35]. Future Outlook - The report anticipates that 2025 will see a steady increase in transaction volumes in first-tier and some second-tier cities, with a stabilization in housing prices. The land market is also expected to regain some heat, with increased transaction values and premium rates [13][14]. - The report emphasizes that the concerns regarding the risk of major real estate companies are gradually alleviating, contributing to a recovery in industry confidence [14].