Core Viewpoint - The article emphasizes the urgent need for targeted governance strategies to address the structural contradictions in China's real estate market, particularly the growing inventory issues that threaten industry stability and financial security [2][4][42]. Group 1: Inventory Pressure and Structural Characteristics - The real estate market in China has entered a deep adjustment phase, with the total inventory exceeding 1.3 billion square meters and a de-stocking cycle projected to last 14 years, far exceeding the healthy range of 5-6 years [2][6]. - Inventory is highly concentrated in a few key areas, with the top 10% of districts accounting for an average of 34% of total inventory in cities, leading to localized supply-demand imbalances [2][18]. - Idle land and unstarted projects contribute significantly to inventory pressure, with 13% of projects in first- and second-tier cities unstarted, representing 33% of the total inventory [3][43]. - Old projects, or "dead inventory," pose significant challenges for de-stocking, with an average of 30% of inventory in second-tier cities being over 10 years old [3][43]. Group 2: Differentiated Challenges Across City Levels - First-tier cities like Beijing and Shanghai maintain a healthy inventory cycle of under 5 years, while many second- and third-tier cities face compounded pressures, with some cities like Nanjing and Chongqing experiencing de-stocking cycles exceeding 20 years [4][15]. - The average de-stocking cycle for first-tier cities is 4.5 years, while second-tier cities average 8.0 years, and third-tier cities average 20.4 years, indicating significant disparities in inventory management [15][16]. - Cities such as Nanjing and Chongqing are particularly at risk due to multiple structural issues, including high levels of unstarted projects and old inventory [4][46]. Group 3: Governance Strategies and Recommendations - The article advocates for a differentiated governance approach, emphasizing the need for targeted policies that address the unique inventory challenges faced by different cities [51][52]. - For high-risk cities like Nanjing and Chongqing, strategies should include accelerating the disposal of idle land and addressing the backlog of city investment projects [51][52]. - In contrast, cities with healthier inventory levels should focus on preventing future risks by monitoring land use and adjusting supply based on de-stocking cycles [52][53].

Group 1 - The concept of "good houses" is being promoted uniformly across cities and developers, indicating a larger strategic plan behind this trend [1][2] - The real estate industry is transitioning from a financial attribute to a manufacturing attribute, driven by the need to mitigate existing risks and bubbles [2][4] - The industry requires a fundamental transformation in product forms to stimulate demand, similar to the shift seen in the automotive market towards electric vehicles [3][4] Group 2 - The confidence of customers must shift from speculation on housing prices to trust in product quality, which is essential for a healthy demand in real estate [5][6] - The real estate market remains substantial, with a scale of trillions, but must now focus on product quality rather than price alone [7][8] - Changes in land policies and costs are leading to the emergence of innovative products that differ significantly from previous offerings [8][10] Group 3 - The gap between new and old properties is expected to widen, with a clear distinction emerging in the market [15][16] - The market will continue to focus on new developments, with smaller project sizes becoming the norm, enhancing market participation and maintaining interest [18][20] - The second-hand market will increasingly rely on intermediaries, with a potential shift in commission structures for agents [21][22] Group 4 - The pricing logic for new properties is evolving, where higher prices must be justified by product quality, reflecting a shift in market dynamics [23][24] - The market is expected to see the emergence of new leaders across various price segments, similar to trends in the electric vehicle market [26][27] - The competition in the real estate sector will be driven by product quality and customer engagement, leading to a more dynamic market landscape [27][28] Group 5 - The industry is undergoing a supply-side reform, combining new land and policies to transition into a new operational model [29][30] - Each city faces challenges in balancing the advancement of new models while addressing existing inventory issues [30][31] - The performance of local real estate markets will heavily depend on the management capabilities of local governments [32]

Core Viewpoint - The recent policies in the real estate sector focus on controlling supply, with measures aimed at reducing future housing supply and promoting high-quality housing development [1][4][18]. Supply Control Measures - The new urban renewal policy emphasizes "no demolition if possible," effectively reducing future supply [1]. - Many cities are implementing immediate sales of newly supplied land to control supply, as the time from land acquisition to sale is longer for pre-sold properties compared to existing ones [1]. - In April, the average land supply floor area in 30 hot cities was 1.94, remaining below 2.0 for nine consecutive months, indicating a trend of controlling supply [2]. Construction and Sales Trends - In April, new housing starts nationwide fell to 48.4 million square meters, a year-on-year decrease of 22%, marking the lowest monthly figure since 2019 [2]. - From January to April, new housing starts totaled 18 million square meters, only 63% of the new housing transaction volume during the same period [2]. - The new housing sales area has reached a historical low, with inventory turnover periods in hot cities returning to a safe zone of under 18 months [2]. Market Dynamics - The monthly sales decline has decreased to below 3%, with new housing sales area and value dropping by 2.8% and 3.2% year-on-year, respectively [4]. - Despite a potential bottoming out in the new housing market, the supply side continues to decline, with new housing starts down by 23.8% in April [4]. - The ongoing decline in new housing starts has persisted for 34 months, leading to a supply-demand imbalance [4]. Inventory and Developer Strategies - The inventory of 50 typical listed real estate companies has decreased for three consecutive years, with completed inventory rising by 5.6 percentage points to 27%, the highest in five years [5]. - Developers are slowing down construction due to reduced inventory turnover rates, with private developers experiencing negative growth in completed inventory [5]. - The shift from high turnover to high-quality housing has been successful, with strict regulations on pre-sale funds ensuring project completion [6]. Quality Housing Trends - The average turnover rate for new homes in key cities reached 37% in April, up 13 percentage points year-on-year, indicating a demand for improved housing quality [8]. - The market for improved housing products is characterized by rapid turnover and competition among developers, leading to a focus on quick sales rather than detailed project development [9]. Price Dynamics - The sales value decline has been less severe than the sales area decline, suggesting a potential rebound in housing prices, with new home prices rising by 3.1% and 1.6% in January-February and January-March, respectively [10]. - However, the overall price stability of new homes is decreasing, with the average price increase slowing to only 0.3% year-on-year in the first four months of the year [10]. Secondary Market Changes - The second-hand housing market is experiencing an increase in listings and a widening price decline, with a 0.4% drop in the price index for 70 cities in April [12]. - The influx of high-quality new homes is impacting the second-hand market, leading to increased listings of larger units and luxury properties [12]. Government and Developer Initiatives - The government and developers are both exploring high-quality housing solutions, with developers focusing on upper limits of quality and the government setting minimum standards [13][14]. - The national strategy for "good housing" aims to enhance supply-side reforms and improve the overall quality of housing, including public facilities and building standards [18][19]. Future Outlook - The transition from asset-driven to consumption-driven housing markets is expected to enhance the utility value of homes, making them more accessible to the general public [21][22]. - The focus on improving spatial value and matching housing with industry and services is anticipated to stabilize the real estate market in the long term [22].

Core Viewpoint - The article emphasizes the Chinese government's strong commitment to stabilizing the real estate market, which is seen as a key driver for economic recovery and consumer confidence [5][50]. Group 1: Government Initiatives - The government work report allocates significant attention to stabilizing the real estate market, indicating a sustained effort to prevent further declines [4][6]. - Four major initiatives are outlined to support the real estate market through 2025, suggesting that it will be a year focused on market recovery [6][8]. - The initiatives include consolidating policy effects to release demand, implementing urban village and dilapidated housing renovations, promoting the acquisition of existing residential properties, and enhancing the quality of new housing [10][12][43]. Group 2: Market Dynamics - The article notes that the real estate sector remains crucial for economic stability, employment, and overall social development, with its contribution to GDP being significant [51][55]. - Data shows that the real estate industry's value added to GDP has increased over the years, highlighting its importance as an economic pillar [55][59]. - The government aims to address the oversupply in the market while simultaneously boosting demand through various measures, including reducing inventory and improving housing quality [21][22][30]. Group 3: Future Outlook - The article predicts that while overall sales may decline, the rate of decline is expected to slow down, particularly in major cities [66][70]. - It suggests that the real estate market will experience significant fragmentation, with core cities maintaining value while many others may see stagnant or declining prices [72][74]. - The anticipated policies are expected to support a gradual recovery, but the market will likely remain challenging, especially for lower-tier cities [66][70].