Core Viewpoint - Since 2025, the real estate market has stabilized, with a weak recovery in new home transactions leading to a decline in both narrow inventory and the de-stocking cycle [1][2][24] Inventory and De-stocking Cycle - As of the end of April 2025, the narrow inventory in 50 cities reached 30.557 million square meters, a month-on-month decrease of 1% and a year-on-year decrease of 10% [2][24] - The de-stocking cycle for key cities has shown a fluctuating downward trend, reaching 20.98 months by the end of April, with a month-on-month decrease of 0.5% and a year-on-year decrease of 6% [1][2][24] - The supply constraints combined with transaction recovery indicate initial success in the industry's de-stocking efforts [2][24] City-Level Analysis - Inventory levels in first-tier cities remained stable at 4.155 million square meters, with a slight month-on-month increase of 2% and a year-on-year decrease of 0.25% [3][24] - Second-tier and third/fourth-tier cities saw a reduction in inventory, with both categories experiencing a year-on-year decline of 11% and 1% respectively [3][24] - The de-stocking cycle in first and second-tier cities has fallen below 20 months, while third and fourth-tier cities still face a cycle of 30 months, indicating ongoing inventory risks [3][24] Inventory Freshness - Over 54% of the inventory in 110 cities consists of supplies from 2020 to 2023, with the proportions for each year being 12%, 14%, 12%, and 16% respectively [9][12] - First-tier cities have a higher inventory freshness compared to second and third-tier cities, with 11.23% of their narrow inventory being newly supplied in 2022-2023, compared to 17.14% in lower-tier cities [8][12] - Cities like Shenzhen, Hangzhou, and Chengdu have a high proportion of fresh inventory, while cities like Wuxi are burdened with older stock [13][24] Product Segmentation - The main inventory segments are 100-120 square meters and 120-140 square meters, accounting for 24% and 20% of the total inventory respectively [15][18] - Three-bedroom units dominate the inventory, making up 52% of the total, while four-bedroom units account for 28% [21][24] - The trend shows a preference for larger three and four-bedroom units as new supply continues to shrink, potentially leading to inventory accumulation [21][24]

Investment Rating - The report indicates a downward trend in inventory levels across 50 key cities, with a 11% year-on-year decrease in narrow inventory as of January 2025 [3][27]. Core Insights - The real estate market is currently in a de-inventory cycle due to restricted new housing supply, with a narrow inventory of 31,093 million square meters as of January 2025, reflecting a 1% month-on-month decrease and an 11% year-on-year decrease [3][27]. - Key cities such as Guangzhou, Wuhan, and Nanjing are experiencing de-inventory cycles exceeding 20 months, indicating potential challenges in inventory clearance [3][27]. - Inventory structure analysis reveals that Guangzhou and Wuhan have a high proportion of inventory in the 100-140 square meter range, while Nanjing faces significant inventory pressure in the sub-70 square meter hotel-style apartments [27]. Summary by Sections Inventory Trends - The narrow inventory in 50 cities continues to decline, with a year-on-year decrease of 11% as of January 2025, and a de-inventory cycle projected to reach 21.53 months by the end of 2025 [3][27]. - Cities like Guangzhou, Wuhan, and Nanjing have de-inventory cycles that remain above 20 months, indicating ongoing challenges in inventory clearance [3][27]. Inventory Structure - In terms of area segments, Guangzhou and Wuhan's main inventory is concentrated in the 100-140 square meter range, while Nanjing has a significant backlog in the sub-70 square meter segment, primarily consisting of hotel-style apartments [7][27]. - The inventory pressure in Guangzhou and Wuhan is attributed to previous oversupply in the mid-sized segment, while Nanjing's pressure is mainly from the small-sized segment [7][27]. Regional Analysis - High inventory levels are noted in the peripheral areas of Guangzhou and Wuhan, such as the Zengcheng and Dongxihu districts, with inventory proportions reaching 23.12% and 14.28% respectively as of January 2025 [11][12]. - Nanjing's Jiangning district shows a balanced supply-demand situation, while the sub-70 square meter hotel-style apartments face significant oversupply, with inventory proportions at 29.2% compared to a transaction proportion of less than 10% in 2024 [23][27].

Core Viewpoint - The real estate market is currently in a de-stocking cycle due to restricted new housing supply, with a notable decline in inventory across 50 key cities, but cities like Guangzhou, Wuhan, and Nanjing still face significant de-stocking challenges due to high inventory levels and extended de-stocking periods [2][4][17]. Inventory Trends - As of January 2025, the narrow inventory in 50 cities decreased to 31,093 million square meters, reflecting a 1% month-on-month decline and an 11% year-on-year decline [4][17]. - The de-stocking cycle for these cities remains high, with periods exceeding 20 months, indicating ongoing challenges in inventory reduction [4][17]. Inventory Structure by Area - In Guangzhou and Wuhan, the main inventory consists of medium-sized units (100-140 square meters), while Nanjing faces significant inventory pressure from small units (below 70 square meters) [6][12]. - Specifically, as of January 2025, Guangzhou's inventory for 100-120 square meters accounted for 21.64%, and Wuhan's for 100-140 square meters was nearly 60% [6][12]. Regional Inventory Characteristics - Guangzhou's and Wuhan's peripheral areas, such as Guangzhou's Zengcheng and Wuhan's Dongxihu, show high inventory levels, with Zengcheng at 23.12% and Dongxihu at 14.28% as of January 2025, both increasing from the previous year [8][10]. - Nanjing's Jiangning district has the highest inventory proportion at 21.2%, indicating a significant accumulation of stock in this area [10][11]. Supply and Demand Analysis - The supply-demand mismatch is evident in Guangzhou and Wuhan's peripheral areas, while Nanjing's mismatch is primarily in the size segment, with small units (below 70 square meters) showing a significant oversupply [12][15]. - In Nanjing, the inventory of small hotel-style apartments reached 29.2% as of January 2025, while the transaction volume for this segment was below 10%, indicating a high likelihood of de-stocking difficulties [16][17]. Conclusion - Overall, the real estate market is still in a de-stocking phase, with Guangzhou, Wuhan, and Nanjing facing unique challenges. Guangzhou and Wuhan have high inventory in peripheral areas, while Nanjing struggles with small unit oversupply, particularly in hotel-style apartments, which may face increased de-stocking pressure in the future [17].