Core Viewpoint - The Chinese real estate market is undergoing a significant transformation, with declining property prices and changing buyer sentiment, leading to a reevaluation of housing as an investment versus a necessity [6][7][12]. Market Trends - In 2025, 52 out of 70 major cities in China reported a month-on-month decline in new residential property prices, while 58 cities saw a drop in second-hand housing prices [6]. - From early 2023 to mid-2025, average residential prices in first, second, and third-tier cities fell by 7.3%, 12.5%, and 18.6% respectively, with some third and fourth-tier cities experiencing declines exceeding 30% [6]. Supply and Demand Dynamics - The urbanization rate in China has reached 66.8%, nearing developed country levels, leading to a decrease in housing demand as the population growth slows [7]. - A survey by the People's Bank of China indicated that the home-buying willingness index dropped to 21.4%, the lowest since 2008, reflecting a cautious approach among potential buyers [7]. Housing Supply Structure - The quality of new residential properties has improved significantly, causing older properties to lose appeal. In first-tier cities, the average price of properties over 15 years old has dropped by 21.3% [8]. Investment Perspective - The average rental yield in major cities is only 1.8%, which is lower than bank deposit rates, raising questions about the viability of real estate as a reliable investment [9]. - Homeowners facing mortgage pressure are advised to manage financial risks carefully, with suggestions to downsize or extend loan terms to alleviate monthly payments [10]. Changing Attitudes Towards Homeownership - A survey revealed that 47.3% of younger generations are unwilling to sacrifice their quality of life for homeownership, with 35.6% considering renting a viable option [10]. - The perception of housing is shifting from a mere investment vehicle to a fundamental necessity for living, promoting a healthier real estate market [12]. Recommendations for Homebuyers - Decisions should be based on individual needs and financial capabilities rather than market speculation [11]. - Emphasis should be placed on property quality over size, and maintaining financial health is crucial to avoid excessive leverage [11]. - Diversifying asset allocation beyond real estate is recommended to mitigate risks [11].