Economic Overview - In the first half of 2025, China's GDP grew by 5.3% year-on-year, ranking among the top major economies globally [1] - The per capita disposable income for residents reached 21,840 yuan, also reflecting a nominal growth of 5.3% compared to the same period last year [1] - The Consumer Price Index (CPI) showed a slight decline of 0.1% year-on-year, indicating a stable yet decreasing trend in domestic prices [1] Real Estate Market Changes - The real estate market continued to experience a decline in both volume and price, with new residential sales area down by 3.5% and sales value down by 5.5% in the first half of 2025 [5] - A significant change in housing prices is expected, with a divergence in price trends across different cities; cities with previously larger declines may see a slowdown, while major cities like Shanghai and Shenzhen may face further price drops [5] - The pre-sale system for commercial housing is anticipated to be gradually abolished, with an increase in the proportion of completed homes for sale, allowing buyers to view properties before purchasing [7] - The government plans to accelerate the market entry of affordable housing, aiming to provide 6 million units over the next five years, which will likely reduce costs for buyers and exert downward pressure on market prices [7] Automotive Market Dynamics - The automotive market is experiencing a price reduction trend, with many brands reducing prices by 20,000 to 30,000 yuan for mid-range vehicles and up to 90,000 yuan for luxury cars [9] - Factors contributing to this price reduction include an influx of new energy vehicles, increased competition from tech companies entering the automotive sector, and a decline in demand due to reduced middle-class incomes [9] Banking and Savings Landscape - Concerns are rising that holding cash may become less valuable due to excessive money supply, with M2 reaching 326 trillion yuan, over twice the GDP of 2024 [11] - Despite a slight decline in CPI, the economy is currently experiencing deflation rather than inflation, as excess money is not circulating into the economy [11] - Although deposit rates have fallen to historic lows, further declines are expected to be limited, as extremely low rates may lead to significant withdrawals from banks, increasing financing difficulties [13]

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]

Core Viewpoint - The implementation of immediate housing sales is an important exploration in constructing a new model for real estate development, but it poses challenges for real estate companies in terms of cash flow and operational capacity [1] Group 1: Transition from Pre-sale to Immediate Sale - Transitioning from the pre-sale system to immediate housing sales may require a transitional period, and a one-size-fits-all approach is not suitable [1] - The real estate industry needs to find a balance between promoting immediate sales and ensuring stable development for companies [1] Group 2: Financial Support and Regulation - Increased financial support for real estate developers is necessary; with more ample development funds, companies will face less pressure and be more motivated to promote immediate sales [1] - The promotion of immediate sales should be combined with strengthened regulation of pre-sale funds to prevent fund diversion and delivery risks, thereby protecting the rights of homebuyers [1]

Core Viewpoint - The recent measures implemented in Xinyang, Henan Province, mandate that newly developed residential properties must be sold as completed units, marking a significant shift from the traditional pre-sale system in China's real estate market [1][3]. Group 1: Current Market Dynamics - The shift to completed unit sales is driven by a changing supply-demand relationship in the real estate market, transitioning from a seller's market to a buyer's market, leading to increased competition among developers [2][3]. - The pre-sale system has been criticized for contributing to poor construction quality and delivery risks, as developers often lack incentives to enhance quality once they receive payment upfront [1][2]. Group 2: Benefits of Completed Unit Sales - Completed unit sales provide greater protection for buyers, ensuring that what they see is what they get, thus safeguarding their rights [1][2]. - This sales model compels developers to focus on quality and shift from rapid construction to more refined operations, potentially leading to a higher standard of housing [2][3]. Group 3: Policy Support and Implementation - The national housing and urban-rural development meeting in 2024 emphasized the need for reform in housing sales, advocating for the promotion of completed unit sales and improved regulation of pre-sale funds [3]. - Financial support for developers is crucial to facilitate the transition to completed unit sales, as it alleviates the pressure on their cash flow and encourages participation in this new model [3].

Core Viewpoint - The recent announcement by the Housing and Urban-Rural Development Bureau of Xinyang City, Henan Province, mandates that all newly developed commercial housing on newly transferred land must be sold as completed properties, which has garnered significant market attention [1] Group 1: Current Market Trends - Over 30 provinces and cities in China have introduced policies related to the sale of completed properties since 2022, including pilot programs and supportive measures such as extending land transfer payment deadlines and increasing housing fund loan limits [1] - The concept of completed properties contrasts with pre-sold properties, with most buyers still purchasing pre-sold units that require one to two years or longer for occupancy [1] Group 2: Implications for Developers - Completed property sales reduce delivery times and lower risks related to consumer rights protection and bank bad debts, but they also increase cost pressures on real estate companies [1] - The cancellation of the pre-sale system has raised concerns in the industry, as developers rely on pre-sale funds and short-term financing to manage cash flow [2] - Transitioning to completed property sales will test the financial strength of developers, as the time for using development loans will be extended, necessitating adjustments in financial support from banks [2] Group 3: Future Outlook - The shift towards completed property sales represents a process of market selection among real estate companies, emphasizing quality in project planning, design, and construction [2] - Companies with strong product capabilities are expected to have better growth opportunities in the evolving market landscape [2]

Core Viewpoint - The increasing call for the cancellation of the pre-sale system in the real estate market is driven by issues such as quality problems, financial risks for developers, and the need for a shift towards selling completed properties instead of pre-sales [1][8][9]. Group 1: Current Trends in Real Estate Sales - Over 30 provinces and cities in China have introduced policies for selling completed properties since 2022, with significant support measures like tax subsidies and increased loan limits [3][12]. - Xinyang, Henan Province, has become the first city in 2023 to implement a comprehensive policy mandating that all new land developments must sell completed properties [3][7]. - The new measures aim to tighten pre-sale permissions, regulate pre-sale funds, and ensure project quality, reflecting a shift towards a more stable real estate market [7][12]. Group 2: Risks and Challenges of the Pre-sale System - The pre-sale system, established in the 1990s, has led to rapid industry growth but has also exposed significant risks, including financial mismanagement by developers and potential project failures [8][9]. - Issues such as delayed delivery, quality discrepancies, and the risk of properties being sold multiple times have raised concerns among buyers [8][9]. - The financial instability caused by the reliance on pre-sale funds has implications for the broader financial system, potentially affecting banks and local governments [9][12]. Group 3: Future Outlook for Real Estate Sales - The trend towards selling completed properties is expected to continue, with a projected increase in the share of completed property sales, reaching approximately 30.84% in 2024 [12]. - Experts believe that this shift will not only reduce risks for buyers but also encourage developers to focus on quality and financial management, moving away from high-leverage operations [12][13]. - The implementation of completed property sales is seen as a crucial step towards creating a sustainable and low-risk real estate market, aligning with future development trends [13][14].

Core Viewpoint - The topic of "immediate housing sales" has gained market attention as multiple regions actively pilot this approach, with supporting policies continuously improving, leading to a steady increase in market share [1][3]. Group 1: Background and Development - The pre-sale system for commercial housing originated in Hong Kong and was introduced to mainland China in the 1990s, becoming mainstream and helping real estate companies quickly recover funds and enhance development efficiency [3]. - However, as the market evolved, issues such as delivery risks and quality disputes associated with the pre-sale system became prominent, prompting the pilot of immediate housing sales to cool down land acquisition during market overheating and ensure delivery amid industry risks [3]. Group 2: Regional Pilot Programs - Hainan was the first province in China to implement immediate housing sales policies at the provincial level, mandating that newly sold land for residential construction must adopt this sales method since March 2020 [3]. - Beijing expanded the pilot scope for immediate housing sales in concentrated land auctions starting in 2021, and after optimizing the concentrated land supply system in 2023, some plots still included a "competitive immediate housing sales" segment [3]. - Shenzhen restarted its exploration of immediate housing sales in August 2023, with plans for all plots to require immediate sales by October 2024 [3]. Group 3: Policy Support - Both central and local governments are collaboratively supporting the pilot of immediate housing sales, with over 30 provinces and cities initiating trials or issuing supportive policies since the end of 2022 [3]. - Cities like Hefei and Zhengzhou have explicitly defined pilot projects, while places like Ganzhou, Jiujiang, and Shandong have introduced measures such as extending land transfer payment deadlines, tax subsidies, and increasing public housing loan limits [3]. - The concept of immediate housing sales was systematically proposed for the first time at the national housing and urban-rural development work conference in January 2023, with several provinces like Shandong and Anhui confirming their pilot programs [3]. Group 4: Market Data and Trends - The proportion of immediate housing sales is gradually increasing, with the National Bureau of Statistics reporting that the sales area for immediate housing in 2024 is approximately 300 million square meters, a year-on-year increase of 19.1%, accounting for 30.84% of total sales [4]. - The market share for immediate housing sales from 2020 to 2023 was recorded at 12.7%, 13%, 17.3%, and 22.5% respectively [4]. Group 5: Industry Implications - The director of 58 Anjuke Research Institute, Zhang Bo, believes that immediate housing sales represent a significant trend for the future of the real estate incremental market and are crucial for promoting high-quality transformation of real estate companies, although comprehensive implementation requires multi-dimensional supporting reforms [4]. - Currently, the timing for full implementation is deemed immature, as rapid execution may elevate market risks and impact the industry negatively [4]. - For real estate companies, immediate housing sales extend the capital recovery cycle and increase pressure, potentially reducing new housing supply in the short term and delaying market recovery [4]. - In the long run, immediate housing sales are expected to enhance product quality, compel companies to optimize design, materials, and amenities, and promote industry competition, accelerating consolidation within the sector [4].