Core Viewpoint - The real estate market is expected to experience a shift, with only 20% of core cities likely to see price increases, while 80% of cities may continue to decline in value. This perspective is based on extensive research and historical data analysis of real estate trends [3][4][5]. Policy Signals - The real estate market is heavily influenced by government policies, including monetary, tax, and land policies. The recent shift in policy towards "promoting stability in the real estate market" indicates a move towards a relaxation phase, which could lead to the removal of various purchase and loan restrictions [5][7]. - A combination of policy measures is anticipated, including the lifting of purchase restrictions, a significant decrease in mortgage rates, and tax reductions to restore market confidence. These measures are expected to stimulate demand and support price increases [7][8]. Economic Indicators - Economic recovery, indicated by rising employment and income levels, is essential for supporting the real estate market. The manufacturing PMI new orders index serves as a leading indicator for economic turning points, which historically correlates with real estate price increases [8][11]. - Other indicators such as the urban resident income confidence index and employment expectation index are also critical for assessing market sentiment and potential price movements [8]. Supply and Demand Dynamics - The relationship between supply and demand is crucial for real estate pricing. A decrease in available residential land and an influx of population into key cities will likely improve the supply-demand balance, leading to price increases in those areas [11][14]. - Notable cities like Hangzhou, Chengdu, and Shenzhen are experiencing significant population growth, which is expected to drive continuous housing demand [11][14]. Summary of Key Signals - The three core signals for potential real estate price increases are: a shift in policy from "relaxation" to "encouragement," the emergence of economic turning points with rising leading indicators, and a reversal in supply-demand dynamics favoring key cities [14].

Core Insights - The real estate market is expected to recover as policies shift from "relaxation" to "encouragement" with significant changes in positioning [1] - Economic indicators are showing signs of recovery, which could support the housing market alongside policy catalysts [1] - A reversal in supply-demand dynamics is anticipated, particularly in hotspot cities where population influx and land supply constraints are expected to drive up prices [2] Policy Shifts - The policy environment is moving towards a "combination punch" approach, including the full lifting of purchase restrictions in first-tier cities and significant reductions in mortgage rates and taxes [1] - The expectation is that purchase restrictions will be fully lifted in the outer rings of first-tier cities within three years [1] Economic Indicators - Leading indicators such as the manufacturing PMI new orders index are showing signs of recovery, which historically correlates with rising housing prices in major cities [1] - Other relevant indicators include the urban resident income confidence index and employment expectation index, both of which have shown positive trends in previous housing market upswings [1] Supply-Demand Dynamics - The housing market is fundamentally driven by supply and demand, with an expected improvement in the supply-demand balance in key cities due to population growth and decreasing land supply [2] - Notable land auction results in cities like Beijing and Shanghai indicate strong market confidence in core urban areas, with premium land sales reflecting long-term optimism [2] - Key cities such as Hangzhou, Chengdu, and Shenzhen are projected to see significant population increases, which will sustain housing demand [2]