Summary of the Conference Call on Beijing Real Estate Policy and 2026 Outlook Industry Overview - The conference call discusses the real estate industry in Beijing, highlighting recent policy changes and their implications for the broader market [1][2]. Key Points and Arguments - **Policy Changes in Beijing**: Beijing has relaxed home purchase restrictions and reduced social security duration requirements, setting a precedent for other cities and indicating a shift in national support for both demand and supply sides of the real estate market [1][2]. - **Future Policy Direction**: The focus of future reforms will be on foundational systems like the housing provident fund, with an emphasis on collaborative execution of policies to address the ongoing decline in the real estate market, which has seen four consecutive years of downturn [1][4]. - **2026 Policy Strategy**: The anticipated approach for 2026 is a "small steps, quick runs" strategy, with gradual adjustments rather than a comprehensive overhaul of policies. Both supply and demand will receive support, but changes will be incremental [1][4]. - **Local Financial Constraints**: The feasibility of local financial subsidies for home purchases is limited by local fiscal capacity, making widespread implementation challenging. Central government involvement is unlikely, with a preference for indirect support measures like lowering the Loan Prime Rate (LPR) [1][5][6]. - **Current Market Status**: The real estate market is currently stagnant, with no expectation of sudden changes. The government aims to integrate real estate into the overall economic development framework, focusing on high-quality growth and enhancing domestic demand [1][6]. - **Price Stability**: Stabilizing second-hand home prices is a critical task, as a projected average price decline of about 10% is expected nationwide. The market is anticipated to remain at an L-shaped bottom, particularly affecting first-tier cities and leading to significant price drops in third and fourth-tier cities [3][10][17]. - **Impact of Policy Measures**: Measures such as purchasing existing homes for affordable housing and promoting trade-in policies have been implemented, but their effectiveness has been limited and requires ongoing monitoring [3][9]. - **Market Predictions**: The average national home price is projected to decline by approximately 10%, with first-tier cities facing greater downward pressure due to higher initial price levels [10][16]. - **Role of Central Government**: The central government is expected to avoid direct financial subsidies and instead utilize indirect methods to stimulate the market, reflecting a cautious approach to direct involvement in real estate funding [6][22]. - **Long-term Market Outlook**: The real estate market is expected to remain in a state of L-shaped bottoming, with no significant recovery anticipated until after 2026. The focus will shift towards optimizing existing stock rather than expanding new developments [17][22]. Other Important Considerations - **Policy Implementation Challenges**: The implementation of storage policies at the local level faces difficulties due to restrictions on increasing local hidden debts and the need for coordination among various departments [21]. - **Potential for Future Taxation**: Preparations for a property tax are underway, but its introduction is unlikely before 2026, as it is contingent on market stabilization [24]. - **Market Dynamics**: The current focus is on price stabilization rather than volume, with the expectation that price adjustments will directly influence market expectations and buyer behavior [8][23]. This summary encapsulates the critical insights from the conference call regarding the Beijing real estate market and its future trajectory, emphasizing the importance of policy adjustments and market stabilization efforts.