Core Viewpoint - Guangzhou is set to optimize its real estate policies by proposing the comprehensive cancellation of purchase restrictions, sales restrictions, price limits, and lowering loan down payment ratios and interest rates, marking a significant shift in the city's approach to real estate regulation [2][3][15]. Group 1: Policy Changes - The proposed plan includes the full cancellation of purchase restrictions, sales restrictions, and price limits, making Guangzhou the first major city to announce such comprehensive measures [2][3]. - The plan also aims to lower the down payment ratios and interest rates for loans, further easing the financial burden on homebuyers [10][16]. - The city has already begun to implement these changes, with significant policy relaxations occurring since the fourth quarter of 2023 [4][6]. Group 2: Market Impact - Since the fourth quarter of 2023, Guangzhou's real estate market has shown signs of recovery, with transaction volumes steadily increasing [6][12]. - In the first five months of 2024, the number of second-hand residential transactions reached 43,785, a 23.6% increase compared to the same period in 2023 [6]. - The net signed contracts for new residential properties also saw a 22% year-on-year increase, indicating a positive market trend [6]. Group 3: Future Outlook - Analysts predict that the comprehensive cancellation of restrictions will stimulate demand and enhance market activity, potentially leading to a stabilization of property prices [15][16]. - The ongoing urban renewal initiatives, including the renovation of old residential areas, are expected to further support property value retention and increase the supply of quality housing in central areas [12][17]. - The overall sentiment suggests that Guangzhou's real estate market is on a path to recovery, with expectations of continued moderate growth in transactions [14].

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].