Core Viewpoint - The real estate market in China is experiencing a divergence between new and second-hand housing prices, with first-tier cities showing more resilience in new home prices compared to second-hand homes, which continue to decline [1][4][10]. Group 1: Price Trends - In August, new home prices in first-tier cities decreased by 0.1% month-on-month, while second-hand home prices fell by 1.0% [1]. - Second-tier cities experienced a more significant decline, with new home prices down 0.3% and second-hand prices down 0.6% month-on-month [1]. - Guangzhou saw the largest year-on-year drop in second-hand home prices, down 6.2% compared to last year [1]. Group 2: Market Dynamics - The second-hand housing market is more reflective of market sentiment, while new homes benefit from quicker supply adjustments and stronger demand in core areas [1][4]. - The divergence between new and second-hand home prices is expected to intensify, leading to the emergence of two distinct markets [4]. Group 3: Supply and Demand Factors - Key factors influencing the new home market include land supply, developer funding, and transaction volume [5]. - The concentration of land supply is increasing, with the top 10 developers accounting for 70% of the new value added in the real estate sector [5][6]. - In Beijing, major developers are acquiring a significant portion of land, leading to a potential regional supply monopoly and a shift towards high-end product development [6]. Group 4: Financial Conditions - Real estate developers' funding reached 64,318 billion yuan in the first eight months of 2025, a year-on-year decrease of 8%, but the decline rate has slowed [8]. - The new housing starts have decreased by 19.5% year-on-year, indicating a potential easing of financial pressures for major developers [8]. - The land market is showing signs of recovery, with the top 100 developers increasing their land acquisition by 31% year-on-year [8][9]. Group 5: Consumer Behavior - The second-hand housing market is characterized by intense competition among individual sellers, leading to a downward price pressure [11][12]. - The decline in personal housing loans indicates a weakened willingness to buy among consumers, despite a potential increase in leverage capacity [13][16]. - Rental prices in cities like Beijing have also decreased, which may further delay potential buyers' plans to enter the market [14].