Core Viewpoint - The real estate market in April showed signs of insufficient recovery, with a notable divergence between the performance of second-hand and new homes, indicating a potential stabilization in first and second-tier cities [1][3]. Group 1: Market Performance - In April, new home sales weakened both year-on-year and month-on-month, with the transaction area of commercial housing declining by 2.9% year-on-year, a drop of 1.4 percentage points compared to March, and a month-on-month decline exceeding 40% [3]. - The average sales price of new homes fell by 4.3% year-on-year, with a decline of 3.5 percentage points compared to March [3]. - In contrast, the second-hand housing market showed resilience, with a year-on-year increase of 20.8% in transaction area across 18 sample cities, despite a month-on-month decrease of 7.3% [3]. Group 2: City-Level Analysis - Among 30 major cities, the transaction area of commercial housing decreased by 12.1% year-on-year in April, with first-tier cities demonstrating resilience due to the support of quality housing supply, leading to a recovery in sales growth to over 20% year-on-year in May (up to the 25th) [3]. - Second-tier and lower-tier cities continue to face pressure, with no improvement in year-on-year growth rates for new home transactions [3]. Group 3: Market Dynamics - The rental yield in April reached 2.3%, with the spread over the 30-year treasury yield increasing to 42 basis points since the beginning of the year, indicating potential for long-term stability in the real estate market when rental yields exceed 2.5% [3]. - The proportion of second-hand home transactions increased to 59.0% in the first four months of the year, up 6.7 percentage points from the entire year of 2024, suggesting a shift from a growth phase to a maturity phase in the market [3]. Group 4: Inventory and Future Outlook - Narrow inventory remains high, but broad inventory has returned to 2010 levels, with de-stocking pressure mainly on existing homes [4]. - The implementation of new housing regulations and adjustments in land acquisition strategies by real estate companies may alleviate the pressure between new supply and existing home inventory [4]. - Cities like Shanghai and Shenzhen in the first tier, and Chengdu, Hohhot, and Nanchang in the second tier, are seen as having conditions favorable for early stabilization in their real estate markets [4].