Core Viewpoint - The article highlights the increasing trend of selling completed properties (现房) in various cities, particularly in Shenzhen, where the proportion of completed property sales has significantly risen, indicating a shift in market dynamics and consumer preferences [2][4][8]. Group 1: Current Market Trends - The proportion of completed property sales in Shenzhen has increased dramatically, with 30.9% of new residential sales being completed properties in the first half of 2025, up from 14.6% in the first half of 2023 [4]. - In June 2025, the completed property sales proportion reached 42%, reflecting a growing consumer preference for immediate occupancy [4]. - The rise in completed property sales is partly due to longer sales cycles for new properties, leading some pre-sale projects to transition to completed sales [4][5]. Group 2: Policy and Industry Response - Various cities are actively promoting completed property sales, with supportive policies being developed. For instance, in May 2023, the housing authority in Xinyang, Henan Province, mandated that all newly sold land must be for completed properties [8]. - The share of completed properties in total residential sales has increased from 10.4% in 2021 to 18.7% in 2023, with a notable increase in completed property sales area by 23% year-on-year in the first half of 2024 [8]. - Industry experts suggest that the shift towards completed property sales is influenced by policy direction, market logic, and the current stage of industry development, although it requires developers to bear the full financial burden until project completion [9].

Group 1 - The Shenzhen real estate market showed resilience in the first half of the year, with new and second-hand home transactions exceeding 65,000 units, a year-on-year increase of 53.2% [1] - The supply of new homes in Shenzhen decreased significantly, with 17,232 new homes supplied in the first half of 2025, down 44.5% year-on-year and 47.7% month-on-month [1] - The marketing heads of local real estate companies indicated that the hot sales of some new projects were due to a "small step, quick run" approach to launching, controlling the supply to observe market conditions [1] Group 2 - In June, the new home online signing volume in Shenzhen exceeded 3,000 units, indicating a relatively stable market despite the traditional "off-season" [2] - The proportion of new homes sold as existing homes increased significantly to 42%, reflecting a clear trend towards selling completed properties [2] - The second-hand residential transactions in Shenzhen reached 29,231 units in the first half of the year, a year-on-year increase of 36.6% [2] Group 3 - The demand for second-hand homes in Shenzhen has shown fluctuations but remains at a relatively high level [3] - The overall demand for both new and second-hand homes is expected to remain stable year-on-year, driven by high-value new homes and strong demand from first-time buyers [3] - The market may continue to experience price pressure due to a large number of listings and competition from high-value new homes, leading to a potential decline in transaction prices in the second half of the year [3]

Core Viewpoint - The Shenzhen real estate market shows significant growth in both new and second-hand housing transactions in the first half of the year, with new housing transactions exceeding 65,000 units, a year-on-year increase of 53.2% [1]. Group 1: New Housing Market - In the first half of 2025, new housing supply in Shenzhen decreased to 17,232 units, down 44.5% year-on-year and 47.7% quarter-on-quarter [1]. - The residential new housing supply was 14,983 units, reflecting a year-on-year decline of 45.6% and a quarter-on-quarter decline of 47.3% [1]. - Three new housing projects sold out on the opening day, indicating strong demand despite the overall supply decrease [1]. Group 2: Sales Strategies and Market Trends - Local real estate companies attribute the hot sales of some new housing projects to a "small step, quick run" strategy, controlling supply to better observe market conditions [2]. - In June, new housing online signing exceeded 3,000 units, maintaining a relatively stable level, with the proportion of new housing sold as existing homes rising to 42% [2]. - The top 20 real estate companies in Shenzhen saw a cumulative sales amount increase of 42.9% in the first five months of the year [2]. Group 3: Second-Hand Housing Market - In the first half of the year, second-hand residential transactions in Shenzhen reached 29,231 units, a year-on-year increase of 36.6% [3]. - The average transaction price for second-hand housing in June was 60,300 yuan per square meter, with a slight month-on-month decrease of 1.5% [3]. - The average listing price for second-hand housing in June was 64,200 yuan per square meter, also showing a slight month-on-month decline of 1.2% [3]. Group 4: Market Outlook - The Shenzhen real estate market is expected to remain relatively stable, driven by consistent demand for both new and second-hand housing [5]. - The market is characterized by a significant presence of second-hand housing, with high listing volumes putting pressure on both listing and transaction prices [5]. - The market may continue to experience fluctuations, with potential for a high-to-low trend in the second half of the year [5].

Investment Rating - The report indicates a positive outlook for the real estate sector, suggesting a potential recovery in the market with a recommendation to accumulate real estate stocks on dips [6]. Core Insights - The A-share real estate sector saw a weekly increase of +3.1%, ranking 17th among all sectors, while the Hong Kong real estate sector increased by +3.9%, ranking 4th [3][19]. - The land market's premium rate has rebounded, with an average premium rate of 9% for the week ending June 27, 2025, despite a year-on-year decrease in land transaction volume [3][30]. - New housing sales in 47 cities totaled 523 million square meters, reflecting a week-on-week increase of +39% but a year-on-year decrease of -14% [4][35]. - Guangzhou is promoting prefabricated buildings, mandating that 100% of residential land sold from 2026 onwards will implement this construction method, which may transform the real estate and construction industries [6][17]. Summary by Sections Real Estate Market Overview - The report highlights a recovery in the real estate market, with significant increases in both new and second-hand housing transactions across various city tiers [4][43]. - The premium rates for land transactions have shown signs of recovery, indicating a potential stabilization in the market [3][30]. Land Transactions - In the week of June 21-27, 2025, 923 million square meters of residential land were transacted across 300 cities, with a year-on-year decrease of -33% [30]. - The top five companies in terms of land acquisition amount are Poly Developments, Greentown China, China Overseas Development, Jianfa Real Estate, and Binjiang Group, with acquisition amounts of 414 billion, 395 billion, 386 billion, 329 billion, and 313 billion respectively [30][31]. New Housing Sales - New housing sales in 47 cities reached 523 million square meters, with a week-on-week increase of +39% and a year-on-year decrease of -14% [4][35]. - The performance varied by city tier, with first-tier cities showing a week-on-week increase of +81% [4][35]. Second-Hand Housing Sales - Second-hand housing transactions totaled 264 million square meters in 22 cities, with a week-on-week increase of +1% and a year-on-year decrease of -2% [43][44]. - First-tier cities experienced a week-on-week increase of +2%, while second-tier cities saw a +1% increase [43][44]. Policy and Market Trends - The report emphasizes the importance of government policies in supporting the real estate market, particularly in Shanghai, where the release of quality land parcels is seen as a positive signal for market recovery [5][13]. - The promotion of prefabricated buildings in Guangzhou is expected to enhance construction efficiency and sustainability, potentially benefiting developers who adopt these practices [6][17].

Group 1 - The Chinese real estate market has long been troubled by high housing prices, the pre-sale system, and shared area issues, with the pre-sale system being particularly criticized for leading to unfinished buildings and poor quality, causing significant economic risks for buyers and damaging market confidence [1][3] - The pre-sale system was introduced in the 1990s to stimulate development and meet housing demand, but its drawbacks have become increasingly apparent, prompting the Ministry of Housing and Urban-Rural Development to propose the concept of "selling existing houses" in early 2023, with several cities initiating pilot programs [3][5] - Many industry experts, including Peking University professor Yao Yang, believe that now is an opportune time to abolish the pre-sale system, arguing that buyers' lack of confidence presents a chance to guide the market towards healthier development [3][5] Group 2 - Opponents of abolishing the pre-sale system express concerns that it may restrict financing channels for developers, potentially leading to bankruptcies among small and medium-sized developers and a significant reduction in the supply of new homes, which could drive up housing prices [5] - However, the argument for abolishing the pre-sale system is strong, as it could effectively prevent unfinished buildings and protect buyers' rights, allowing them to inspect properties before purchase, thereby compelling developers to improve construction quality [5] - Current data from the Ministry of Housing indicates that China has over 600 million existing housing units, which is sufficient to meet the needs of its 1.4 billion population, suggesting that abolishing the pre-sale system could promote healthier market development and enhance buyers' living experiences and market confidence [5]

Investment Rating - The report maintains a recommendation for the real estate sector, indicating that the sector has entered an investment range with a price-to-book (PB) ratio of approximately 1.0 times, reflecting concerns about the impact of current sales on business models [2][38]. Core Insights - The real estate market is experiencing a low-level oscillation in sales, with a year-on-year decline in new housing sales area of -3.3% in May, indicating continued pressure on sales due to weak inventory and new supply trends [14][15]. - The report highlights that the funding chain index for real estate has declined, remaining at historically low levels, but anticipates potential improvements in the financial situation of some companies as supply and demand policies gradually take effect [2][10]. - The report suggests that the decline in mortgage rates may help stabilize total demand for new and second-hand homes, with a focus on the new housing market showing earlier signs of marginal improvement compared to the second-hand market [38]. Summary by Sections Sales Data - In May, the adjusted year-on-year growth rate for sales area was -3.3%, with a total sales area of 35.3 million square meters, reflecting a continued low market heat [14][15]. - The cumulative sales amount from January to May was 3.4 trillion yuan, with a year-on-year decline of -3.8% [10][15]. Construction Data - The new construction area in May saw a year-on-year decline of -19.3%, indicating a tightening balance in new construction under the current market conditions [39][40]. - The report maintains that the completion rate will likely remain low until the second half of 2026, with a May completion area decline of -19.5% year-on-year [39][40]. Investment Trends - Real estate development investment in May showed a year-on-year decline of -12.0%, reflecting a synchronized drop in construction area and ongoing inventory reduction efforts by developers [2][39]. - The report emphasizes the importance of focusing on companies with stable cash flow generation capabilities and those that can navigate the current market challenges effectively [38].

Investment Rating - The report rates the real estate industry as "Outperforming the Market" [1] Core Viewpoints - New home sales in May showed a month-on-month increase, with a narrowing year-on-year decline. The total new home sales area in 40 cities reached 10.414 million square meters, up 12.4% month-on-month but down 3.2% year-on-year, with the year-on-year decline narrowing by 5.6 percentage points compared to April [12][15] - The second-hand housing market showed weakening momentum, with a month-on-month decline in transaction volume and a narrowing year-on-year growth rate. The total transaction area for second-hand homes in 18 cities was 8.104 million square meters, down 15.9% month-on-month but up 3.6% year-on-year, with the year-on-year growth rate narrowing by 8.7 percentage points [20][24] - The land market continues to exhibit a "quality over quantity" trend, with a decrease in transaction volume but an increase in average land prices. The average land premium rate in May was 4.6%, down 3.6 percentage points month-on-month but up 2.3 percentage points year-on-year [11][19] Summary by Sections New Home Sales - In May, new home sales area increased month-on-month and the year-on-year decline narrowed. The total area sold in 40 cities was 10.414 million square meters, with a cumulative year-on-year growth of 1.1% for the first five months [12][15] - First-tier cities saw a month-on-month increase of 14.9% and a year-on-year increase of 10.7%. Notably, Beijing's sales increased by 22% year-on-year, while Shenzhen experienced a decline [13][18] Second-Hand Home Sales - The second-hand home market showed a month-on-month decline in sales, with a year-on-year growth rate narrowing. The total area sold in 18 cities was 8.104 million square meters, with a cumulative year-on-year growth of 19.1% for the first five months [20][24] - First and second-tier cities experienced a decrease in transaction volume, while third and fourth-tier cities saw a shift from positive to negative year-on-year growth [21][25] Land Market - The land market showed a decrease in transaction volume but an increase in average land prices. The average land premium rate was 4.6%, indicating a continued trend of "quality over quantity" [11][19] - The total land transaction area in May was 17.1148 million square meters, with a month-on-month increase of 9.8% but a year-on-year decrease of 2.7% [19] Real Estate Companies - The top 100 real estate companies saw a year-on-year sales decline of 11.1% in May, with a cumulative decline of 8.4% for the first five months [35] - The land acquisition amount for the top 100 companies decreased month-on-month, with a total acquisition amount of 70.6 billion yuan in May, down 47.4% month-on-month [39] Policy Support - Multiple financial support policies for the housing market were implemented, including a 0.5 percentage point reduction in the reserve requirement ratio and a 0.1 percentage point reduction in policy interest rates [4][5] - The government aims to stabilize the real estate market and enhance financing mechanisms to support housing demand [4][5] Market Performance - The real estate sector underperformed compared to the CSI 300 index in May, with an absolute return of -0.4% and a relative return of -2.3% [47][48] - The report suggests that the market is still in a phase of adjustment, with ongoing efforts needed to restore confidence and improve supply-demand relationships [4][5]

Core Viewpoint - The real estate market in China is experiencing a series of favorable policies aimed at stimulating demand and improving accessibility for potential homebuyers as 2024 approaches, with expectations for significant trends in 2025 [2] Group 1: Policy Changes - Most cities in China have lifted purchase restrictions, allowing more potential buyers to enter the market, except for core areas in first-tier cities like Shanghai and Shenzhen [2] - Financial policies remain accommodative, with mortgage rates dropping to around 3.2%, and down payment ratios reduced from 30% to 15%, effectively lowering the barriers to homeownership [2] - The government has implemented tax relief measures, including reductions in deed tax and value-added tax, to alleviate the financial burden on homebuyers [2] Group 2: Market Trends for 2025 - The market is shifting towards the sale of completed homes, moving away from the pre-sale model, which will enhance buyer confidence and impose higher standards on developers regarding financial strength and project quality [4] - The second-hand housing market is facing significant challenges, with listing volumes in major cities like Shanghai, Chongqing, and Chengdu exceeding 150,000 units, leading to price reductions as sellers seek to close deals amid weak demand [4] - The government aims to provide 6 million units of affordable housing over the next five years, which is expected to ease housing pressure for low-income groups and divert some demand from the commercial housing market [4] Group 3: Financial Outlook - Current mortgage rates are in the range of 3.2% to 3.5%, with predictions that they may drop below 3% in 2025 to stimulate demand amid a declining market [6] - The overall trend for housing prices is expected to be "stable with a downward bias," as the market has entered a long-term adjustment phase, with significant price drops observed in cities like Zhengzhou and Tianjin [8] - For instance, in Shanghai, prices have decreased from nearly 100,000 yuan per square meter to approximately 65,000 yuan per square meter, reflecting a decline of over 30% [8]

Investment Rating - The investment rating for the real estate industry is "Positive" and maintained [12] Core Insights - The focus on ensuring the delivery of homes has made the sale of completed properties a key task, leading to accelerated promotion of this sales model in 2023. Central and local governments are progressively implementing pilot programs for completed property sales, with a high likelihood of gradual implementation and supportive policies [2][7] - The transition to completed property sales is expected to decrease project turnover rates and pressure profit margins, resulting in a significant short-term decline in sales scale for real estate companies. Maintaining sales scale will require additional financing, leading to a substantial reduction in the industry's financial attributes and an increase in manufacturing attributes. This shift will demand higher capabilities in land assessment and product quality from companies, benefiting those with the ability to generate excess cash flow and potentially increasing industry concentration [10] Policy Path - The policy path for completed property sales has evolved from suppressing overheating to preventing risks. The transition has been marked by pilot programs in various cities since 2014, which were largely paused except for Hainan. With the emphasis on ensuring home delivery, completed property sales are being accelerated again in 2023, with conditions set for their implementation [7][21] Project Analysis - Transitioning from pre-sale to completed sale models can significantly impact financial metrics. For instance, net profit margins may drop from 11.4% to 8.6%, and the internal rate of return (IRR) could decrease from 17.3% to 6.4%. The time to achieve positive cash flow may extend from 20 months to 34 months under the completed sales model [8][9] - The impact of completed sales is less severe in scenarios with higher land-to-value ratios or stricter pre-sale conditions. For example, if the land-to-value ratio increases from 1.8 to 2.0, the net profit margin and IRR would be less affected [9][10] Potential Impacts - The implementation of completed property sales is expected to lead to a decline in sales scale for real estate companies, with new land acquisitions unable to generate supply, relying instead on historical inventory. This will necessitate more financing to maintain sales levels in the medium to long term. Cities with lower inventory levels will be more affected, while those with higher inventory may transition more smoothly [10]

Core Viewpoint - The recent policy from the Housing and Urban-Rural Development Bureau of Xinyang, Henan Province, mandates that all newly developed commercial housing must be sold as completed properties, reigniting discussions on the implications and challenges of "existing house sales" in the real estate market [1][2]. Policy Developments - Existing house sales refer to the sale of properties that have been completed and meet legal delivery conditions, allowing buyers to occupy and register ownership immediately after the transaction [1]. - Since the end of 2022, various regions in China have been implementing policies to promote existing house sales, with notable examples in Anhui and Hubei where pilot projects have seen high sales rates [2]. - Xinyang's new policy is the first to comprehensively implement existing house sales in a city, distinguishing between new and old projects regarding pre-sale permissions [2]. Market Dynamics - The shift towards existing house sales is driven by the need to mitigate risks, reduce inventory, and control supply in the real estate market [2][4]. - The proportion of existing house sales in new housing has been steadily increasing, reaching 36% in the first quarter of this year [5]. - The transition to existing house sales is seen as a necessary evolution towards a more mature and stable real estate market that prioritizes risk control and buyer protection [3][6]. Industry Implications - Existing house sales require developers to invest fully in projects before recovering funds, increasing financial and time costs compared to pre-sale models [3]. - The focus on existing house sales is expected to enhance product quality as developers strive to attract buyers, thereby improving overall market standards [4]. - The current trend indicates a gradual coexistence of existing and pre-sale models, with existing house sales likely to dominate in the future [6][7]. Global Context - The global real estate market exhibits diverse sales models, with a common trend towards stricter regulation of pre-sale activities and enhanced buyer protection [7]. - The evolution of the real estate market in China reflects a broader movement towards ensuring safer transactions and better meeting housing demands through improved regulatory frameworks [7].