Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report indicates that the transaction area of new and second-hand houses has increased on a month-on-month basis, while year-on-year figures show a decline. The report emphasizes the need to improve the financial infrastructure of the real estate sector and highlights the implementation of supportive financial policies by the central bank to stabilize the market [3][4][57] Summary by Sections Financial Infrastructure Improvement - The central bank aims to establish a multi-level and diversified pension financial system to support high-quality development of the silver economy and address the challenges of an aging population. It emphasizes enhancing financial support to boost consumption and implementing policies to help individuals restore credit [4][12] - The government of Hangzhou has introduced measures to optimize land resource allocation, focusing on precise configuration of new land and effective activation of existing land [4][12] Sales Performance - In the 46th week of 2025, the transaction area of new residential properties in 68 major cities reached 1.93 million square meters, showing a year-on-year decline of 36% but a month-on-month increase of 15%. Cumulatively, the transaction area from the beginning of the year to date is 10,337 million square meters, with a year-on-year decline of 15% [5][15] - The transaction area of second-hand houses in 20 cities was 1.88 million square meters, with a year-on-year decline of 16% and a month-on-month increase of 6%. The cumulative transaction area for the year is 8,630 million square meters, showing a year-on-year increase of 3% [32] Investment Performance - In the 46th week of 2025, the planned land area released in 100 major cities was 6,292 million square meters, with a transaction area of 1,189 million square meters, reflecting a year-on-year decline of 41%. The average transaction premium rate was 1.4% [38] - The transaction area of land in first-tier cities decreased by 19% year-on-year, while second-tier cities saw a slight decline of 0.3%, and third-tier cities experienced a significant drop of 61% [38] Financing Conditions - The issuance of domestic credit bonds in the 46th week of 2025 was 2.62 billion yuan, representing a year-on-year decrease of 46% and a month-on-month decrease of 64%. The cumulative issuance for the year reached 354.92 billion yuan, showing a year-on-year increase of 2% [6][46] Market Performance - The real estate index increased by 2.7% during the week, outperforming the Shanghai and Shenzhen 300 index, which fell by 1.08%. This indicates a relative performance advantage for the real estate sector [51]

Core Viewpoint - The real estate market in Shanghai shows a notable performance amidst a differentiated adjustment in the national market, with new residential prices increasing while second-hand prices decline [1][4]. Group 1: New Residential Market - In August, Shanghai was the only first-tier city to experience a month-on-month increase in new residential prices, rising by 0.4%, compared to a 0.3% increase in July, while the year-on-year growth slightly decreased from 6.1% to 5.9% [1][2]. - The influx of high-quality improvement-type housing in core areas of Shanghai has significantly boosted sales, with some popular projects experiencing immediate sales upon launch, contributing to the overall price increase [3]. - Policy incentives, such as the relaxation of purchase restrictions and lower mortgage rates, have instilled confidence in buyers, further stimulating demand in the new housing market [3][6]. Group 2: Second-hand Residential Market - The second-hand housing market in Shanghai saw a month-on-month decline of 1.0% and a year-on-year decrease of 2.6%, reflecting a broader trend of adjustment across the national market [4][5]. - Despite the overall decline, certain segments of the second-hand market, particularly larger residential communities and properties near transit lines, are showing signs of stabilization in transactions and prices [5]. - The overall market sentiment is improving, as indicated by a 2.8% increase in the real estate agency industry’s prosperity index, suggesting a gradual recovery in market demand [5]. Group 3: Market Outlook - The market is expected to end the downward trend observed since June, with an anticipated increase in transaction volumes during the traditional peak season of "Golden September and Silver October" [6]. - Long-term prospects include accelerated progress in affordable housing refinancing and demand release from urban village redevelopment, which are expected to inject new momentum into the market [6].

Core Insights - The national real estate market in August continued to show a differentiated adjustment trend, with policy benefits gradually becoming evident and market confidence showing positive changes, indicating a clearer market bottom and laying the foundation for the traditional peak season of "Golden September and Silver October" [1][2] Group 1: Market Trends - In first-tier cities, the decline in new home prices has shown signs of narrowing, with new residential sales prices decreasing by 0.1% month-on-month, a reduction of 0.1 percentage points compared to July, indicating resilience in core city markets [1] - Shanghai experienced a month-on-month increase in new home prices of 0.4%, attributed to the concentration of quality improvement-type housing in core areas and the relaxation of purchase restrictions in outer areas, which effectively stimulated demand [1] Group 2: Three-tier City Challenges - Third-tier cities face significant inventory pressure due to previous years' stimulus policies leading to oversupply, and the support for these cities is relatively weaker compared to first and second-tier cities, limiting their self-adjustment capabilities [1] - Although measures such as converting existing housing into affordable housing have alleviated some inventory pressure, the direct effects of policies are gradually weakening due to continuously decreasing demand [1] Group 3: Industry Outlook - The real estate brokerage industry’s prosperity index rose by 2.8 to 47.26 in August, marking the largest single-month increase of the year, with new and second-hand housing search heat slightly increasing by 0.6 and 1.0 respectively compared to July, signaling positive market sentiment [2] - It is anticipated that September may end the downward trend observed since June, with transaction volumes expected to rebound as the traditional peak season approaches, supported by favorable policies [2] - In the medium to long term, the acceleration of the implementation of affordable housing refinancing and the monetization of urban village renovations are expected to inject new momentum into the market [2]

Core Viewpoint - The new housing transaction area has increased month-on-month, while the real estate financial system is being improved to stabilize the market [1][39]. Policy Aspect - The People's Bank of China has implemented a moderately loose monetary policy, emphasizing the importance of maintaining liquidity and aligning social financing with economic growth [2][8]. - Local governments are introducing measures to facilitate housing fund withdrawals for down payments, such as in Tianjin and Zhengzhou [2][9]. Market Aspect - In the 33rd week of 2025, the transaction area of new homes in 68 cities was 1.68 million square meters, a year-on-year decrease of 12% but a month-on-month increase of 4% [3][10]. - The transaction area of second-hand homes in 20 cities was 1.69 million square meters, with a year-on-year decline of 6% [23][20]. - Land transaction area in 100 major cities increased by 33% year-on-year, with a premium rate of 1.9% [26][32]. Investment Aspect - The land auction market in Shenzhen was active, with a plot sold for 8.64 billion yuan, achieving a premium rate of 34.81% [4][39]. - The total land area sold in first-tier cities increased by 100% year-on-year, while second-tier cities saw a slight decline [26][39]. Financing Aspect - The issuance of domestic credit bonds decreased significantly, with a total of 3.66 billion yuan issued, down 53% year-on-year and 81% month-on-month [5][32]. Weekly Market Review - The real estate index rose by 3.94% in the week, outperforming the broader market [36]. Investment Recommendation - The industry maintains a "positive" rating, anticipating further stabilization in the real estate market due to ongoing policy support [39][41].

Policy News - The People's Bank of China (PBOC) aims to broaden the usage of re-loans for affordable housing to stabilize the real estate market [1] - Major cities including Beijing, Shanghai, Guangzhou, and Shenzhen have announced a reduction in personal housing provident fund loan rates, with first-time loan rates adjusted to 2.1% for loans under 5 years and 2.6% for loans over 5 years [1][3] - Beijing's 2025 housing development plan emphasizes the construction of quality housing to meet diverse needs and improve market expectations [1] Market News - The PBOC has reduced personal housing provident fund loan rates by 0.25 percentage points effective May 8, 2025 [3] - The total sales of the top 100 real estate companies in the first four months of 2025 reached 111.986 billion yuan, a year-on-year decrease of 10.2% [4] Real Estate Transactions - Beijing Construction Engineering secured a land plot in Huairou District for 359 million yuan, with a floor price of approximately 16,500 yuan per square meter [5] - In Shanghai, four land parcels were auctioned for a total of 9.709 billion yuan, with significant premiums for certain plots [6][7] Company News - Country Garden Services has agreed to provide a 1 billion yuan loan to its major shareholder to support the group's housing delivery efforts [8] - Several real estate companies reported their sales performance for the first four months, with Poly Development achieving sales of 87.649 billion yuan and China Overseas Development at 66.583 billion yuan [9][10][11][12][13][14][15]

Core Viewpoint - The new policy on the acquisition of existing residential properties shows significant relaxation compared to previous regulations, which is expected to resolve previous bottlenecks in the process [1][11]. Summary by Sections Policy Changes - The government has introduced greater autonomy for local governments regarding the acquisition of existing residential properties, including flexibility in acquisition subjects, pricing, and usage [1][3][11]. - The government work report has expanded the scope of guaranteed housing refinancing, allowing for a broader range of funding sources for property acquisition [1][10]. Pricing Issues - Previously, the acquisition price was mandated to be based on replacement cost, which was approximately half of the market price, leading to reluctance from developers to sell [3][4]. - The new policy allows local governments to negotiate acquisition prices that are higher than replacement costs but lower than market prices, potentially alleviating previous pricing barriers [3][4][6]. Acquisition Models - The relaxation of restrictions on acquisition subjects and purposes is expected to lead to more diversified acquisition models, allowing for participation from various market entities beyond local state-owned enterprises [6][7][11]. - The government has emphasized the priority of using acquired properties for affordable housing, urban village redevelopment, and other community needs [6][11]. Funding Sources - The expansion of the guaranteed housing refinancing program is anticipated to provide a richer array of funding sources for property acquisition, including residential, commercial, and other types of properties [9][10]. - Local governments are encouraged to utilize special bonds, with a proposed allocation of 4.4 trillion yuan for various projects, including the acquisition of existing residential properties [11].