Core Insights - The report indicates a recovery in real estate prices, with capital market sentiment expected to reach a "singularity" soon [1] - The industry rating remains at "Buy," consistent with previous assessments [2] Policy Updates - Local governments are implementing targeted policies, such as Nanjing's "sell old buy new" loan interest subsidy, which offers a 1% subsidy on total loan amounts for buyers completing transactions by the end of 2026 [5][16] - Other cities like Zhengzhou and Chengdu are optimizing housing fund policies to support home purchases [16][17] Transaction Performance - The new housing market is showing signs of improvement, with a 31.6% week-on-week increase in transaction area across 49 cities, and a year-on-year increase of 48.1% when aligned with the Spring Festival [19][20] - Second-hand housing transactions also saw a 7.5% week-on-week increase, with a year-on-year growth of 13.5% [19] Market Sentiment - The report notes a significant increase in new housing supply, with a 58% week-on-week rise in new housing launches, while second-hand listings continue to decline [5] - The sentiment in the second-hand housing market remains unexpectedly strong, contributing to a gradual recovery in market confidence [5] Land Market Performance - The report highlights a decrease in land transaction volumes, with a 37.3% week-on-week drop in land sales revenue across 300 cities [19] Company Valuations and Financial Analysis - Key companies in the real estate sector are rated as "Buy," with reasonable values set for several firms, including Vanke A at 7.64 RMB and China Overseas Development at 16.02 HKD [6] - The report provides detailed financial metrics for various companies, indicating potential for valuation recovery [6] C-REITs Market Overview - The C-REITs sector saw a 0.85% decline in the comprehensive return index, with 12 out of 78 REITs experiencing gains [5]

Core Viewpoint - The real estate market is expected to stabilize after a period of contraction, supported by both long-term and short-term factors, making it unlikely to replicate last year's accelerated decline [2][4]. Group 1: "Little Spring" Characteristics - Transaction volume in key cities showed a year-on-year decline of 14.5% from March 1 to 26, 2026, with first, second, and third-tier cities experiencing declines of -2.9%, -22.7%, and -15.6% respectively [5]. - Shanghai's weekly second-hand housing transaction volume reached a new high since 2021's "Little Spring," with March transactions expected to exceed 31,000 units, marking the best performance since April 2021 [6]. - The real-time transaction data indicates a 13.0% year-on-year increase in second-hand housing transactions across 26 key cities, with first, second, and third-tier cities showing growth rates of 8.2%, 14.8%, and 30.2% respectively [10]. Group 2: Listing Prices - National listing prices have shown a widening decline, with a 0.5% drop as of March 22, 2026, compared to a 0.1% drop in February [13]. - The increase in second-hand housing listings in key cities has led to a renewed downward pressure on prices, with Shanghai's listings rising from 84,000 to 87,000 units [16][19]. - The increase in listing volume is a key determinant of price trends, with a 0.6% month-on-month increase in listings across 26 key cities, significantly lower than the 5.1% increase seen in the same period last year [19]. Group 3: Transaction Structure - The transaction structure in key cities has improved, with the proportion of transactions over 3 million yuan rising from 37% in December 2025 to 41% in February 2026 [22]. - Major cities like Shanghai, Shenzhen, and Guangzhou have seen transaction values increase by 7.0%, 6.7%, and 4.3% respectively compared to the end of last year [23]. - The overall affordability of housing has improved, with the cumulative decline in listing and transaction prices indicating a significant reduction in the real estate valuation bubble [24][37]. Group 4: Future Market Outlook - The real estate market is supported by long-term factors such as cumulative price declines and rental yield rates, indicating that further price drops are limited [28][30]. - The supply-side pressure in the current "Little Spring" is relatively manageable, reducing the likelihood of a repeat of last year's accelerated decline [37][38]. - The market is expected to enter a new phase of price negotiation following the "Golden March and Silver April" period, with potential for slight price declines but not a rapid drop [44].

Summary of Conference Call on Real Estate Market Trends in 2026 Industry Overview - The conference call discusses the real estate market in 2026, highlighting a divergence between new and second-hand housing sales. New home sales are weak, while second-hand home sales are strong, with 44 cities showing a cumulative year-on-year decline of 27% in new home sales, contrasted by a 9.6% increase in second-hand home sales across 22 cities, marking a four-year high [1][2]. Key Points and Arguments New vs. Second-Hand Housing Market - New home sales are at their lowest level in four years, with a cumulative year-on-year decline of 27% across 44 cities. First-tier cities saw a slight increase of 1.8%, while second-tier cities grew by 3.8%, and third and fourth-tier cities experienced a decline exceeding 30% [2]. - Second-hand home sales are performing well, with a 9.6% year-on-year increase in 22 cities, nearly matching the sales levels of 2023. First-tier cities saw a 13% increase, second-tier cities 6%, and third and fourth-tier cities 18% [2]. Price Trends - The price decline in key cities has moderated, with a 0.5% drop post-Spring Festival compared to a 1.3% decline in the same period last year. First-tier cities have stabilized, while second-tier cities saw a 0.2% drop and third and fourth-tier cities a 0.12% drop [3]. Market Indicators - The market shows signs of high transaction volumes but weakening prices, indicating that the "small spring" may be nearing its peak. The number of listings in 49 key cities increased by only 1% post-Spring Festival, compared to a 3.5% increase in 2025 [3][4]. - Viewing activity peaked but has recently declined by 2%, suggesting a potential downturn in transaction volumes in the coming weeks [4]. Buyer Behavior and Pricing Dynamics - The average negotiation rate across 40 cities is 10.8%, up by 0.5 percentage points, indicating buyers are securing more discounts. First-tier cities saw a slight narrowing of negotiation rates, while second and third-tier cities experienced increases [4]. - Smaller units are driving sales, with 38-41% of second-hand home sales in first-tier cities being below 70 square meters, up by 3-3.5 percentage points from 2025 [5]. Investment Strategy Recommendations - The current "small spring" differs from previous years as it lacks significant policy support, indicating a natural market recovery. Investment strategies should focus on companies with low historical burdens and those in the home improvement and furnishing sectors [5][6]. - Suggested investment directions include: 1. Prioritize companies with valuations at historical lows and a safety margin [6]. 2. Focus on companies with low land acquisition ratios post-2022, which may show better resilience as the market stabilizes [6]. 3. Look for regional markets showing signs of price stabilization, such as Hong Kong's real estate sector [6]. 4. Pay attention to the post-cycle real estate supply chain, as increased second-hand sales may boost demand in home improvement and appliance sectors [6].

Investment Rating - The report maintains an "Overweight" rating for the real estate development and services sectors [7] Core Insights - The current real estate market is showing signs of stabilization, with a notable increase in second-hand housing transactions, indicating a potential bottoming out of the market [5][6] - The "small spring" phenomenon in the second-hand housing market is the strongest seen in three years, with significant demand and a stable mindset among sellers [1][2] - Policy-driven cities, particularly Shanghai, are experiencing remarkable growth in transaction volumes, with small units becoming the main focus of sales [4][65] Summary by Sections Market Performance - New housing transaction volume has decreased by 8.8% year-on-year, while second-hand housing transactions have reached a new high since 2023, with a 22% increase in transaction volume across 26 cities [2][28] - The price index for second-hand housing has stabilized, with minor fluctuations observed in March, while first-tier cities remain relatively strong [2][49] Forward Indicators - The number of listings has increased seasonally but at a slower pace compared to last year, indicating a stable mindset among homeowners [3][52] - Viewing activity has shown a decline, which may impact future transaction volumes [3][59] - The bargaining rate has widened, reflecting a significant difference in price expectations between buyers and sellers [3][61] Characteristics of the "Small Spring" - Cities with effective policy measures, such as Shanghai, have shown impressive performance, with a 17.4% year-on-year increase in transaction volume [4][65] - Small units are becoming the primary focus of transactions, driven by affordability and supportive policies [4][74] Investment Recommendations - The report recommends focusing on high-quality real estate companies and service providers that are well-positioned for long-term growth, particularly those with strong credit ratings and operational capabilities [5][79] - Specific companies highlighted for investment include China Overseas Development, China Resources Land, and Longfor Group, among others [10][81]

Investment Rating - The report maintains a "Positive" investment rating for the real estate sector [9] Core Insights - The current "small spring" in the real estate market shows characteristics such as price-driven volume, stronger second-hand housing compared to new homes, dominance of core cities, and a high proportion of demand from first-time buyers. However, the overall performance is not exceeding expectations, indicating a structural issue in transaction volume sustainability [2][3][60] - Beijing and Shanghai are accumulating positive signals, with a notable reduction in supply due to sellers withdrawing listings. The inventory and de-stocking cycles in these cities are at healthy levels, suggesting a potential stabilization in housing prices [2][3][60] - The report suggests that Beijing and Shanghai may lead the recovery in housing prices during this downturn, with a timeline expected within the next two years. Investors are advised to closely monitor market conditions for potential opportunities [2][3] Market Performance - The A-share real estate index experienced a weekly decline of 4.21%, underperforming the CSI 300 index [14] - The Hong Kong real estate index showed a weekly increase of 0.23%, outperforming the Hang Seng index [19] Second-hand Housing Weekly Tracking - Transaction volumes in first and second-tier cities continue to rise, with Shenzhen seeing a significant week-on-week increase of 19.8%. Beijing's transaction volume increased by 8.0% [4][37] - The average listing price in first-tier cities has turned positive, with Shanghai's listing price increasing by 0.11% week-on-week [23] New Housing Weekly Tracking - New home transactions in Beijing, Shanghai, and Shenzhen have shown continued growth, with Beijing's week-on-week increase at 32% and Shenzhen at 27% [5][57] - The inventory of new homes in first-tier cities continues to decline, with a week-on-week decrease of 0.7% [59] Investment Recommendations - The report recommends focusing on national real estate companies or local state-owned enterprises that are deeply engaged in the Beijing and Shanghai markets, given their leading performance [3][6][60]

Investment Rating - The report maintains an "Outperform" rating for the real estate sector, indicating a positive outlook despite current challenges [1]. Core Insights - The real estate market is showing signs of recovery, with a notable increase in second-hand housing transactions, particularly in key cities, suggesting a potential "small spring" in the market [2][13]. - The report highlights a divergence in the performance of new and second-hand housing markets, with second-hand housing transactions outperforming new housing sales [5][17]. - The overall sentiment in the real estate market remains cautious, with expectations for further policy support to boost market confidence [2][19]. Summary by Sections Market Overview - As of mid-March 2026, second-hand housing transactions in 20 cities reached 46,018 units, a year-on-year increase of 22.5% during the lunar new year period [13]. - The cumulative second-hand housing transactions for the year until March 15, 2026, were 121,412 units, reflecting a 5.7% year-on-year increase [14]. New Housing Market - New housing sales in 24 key cities saw a significant decline, with a year-on-year decrease of 20% in transaction volume for the first half of March 2026 [16]. - The performance of new housing is notably weaker in first and second-tier cities, while third and fourth-tier cities are experiencing a recovery [17]. Credit Market - The issuance of real estate credit bonds totaled 83.35 billion yuan this week, with a net financing amount of -95.36 billion yuan, indicating ongoing challenges in the credit market [19][39]. - Cumulative issuance of real estate credit bonds reached 831.20 billion yuan, with a net financing amount of -249.01 billion yuan year-to-date [19]. REITs Market - The REITs index showed a slight increase of 0.08%, with the property-type REITs index declining by 0.26% and the operating rights REITs index increasing by 0.50% [40][52]. - The total transaction volume for REITs this week was 8.37 billion yuan, with property-type REITs accounting for 3.83 billion yuan and operating rights REITs for 4.54 billion yuan [54].

Investment Rating - The report maintains a "Positive" outlook on the real estate industry [9] Core Insights - The current "small spring" in the real estate market shows characteristics such as price-driven volume, stronger second-hand housing compared to new homes, dominance of core cities, and a high proportion of demand from first-time buyers. However, the overall performance is not exceeding expectations, indicating that the recovery may be limited [2][3] - Beijing and Shanghai are accumulating positive signals, with a notable reduction in supply due to sellers withdrawing listings. The inventory and de-stocking cycles in these cities are at healthy levels, suggesting a potential stabilization in housing prices [2][3] - The report suggests that Beijing and Shanghai may lead the recovery in housing prices during this downturn, with a timeline expected within the next two years. Investors are advised to closely monitor market conditions for potential opportunities [2][3] Market Performance - The A-share real estate index experienced a weekly decline of 4.21%, underperforming the CSI 300 index [14] - The Hong Kong real estate index showed a weekly increase of 0.23%, outperforming the Hang Seng index [19] - Individual stock performance highlights include a 23.97% increase for Beijing Investment Development and a 1.76% increase for Sun Hung Kai Properties [19][21] Second-hand Housing Weekly Tracking - Transaction volumes in first and second-tier cities continue to rise, with Shenzhen seeing a significant week-on-week increase of 19.8%. Beijing's transaction volume increased by 8.0% [4][37] - The average listing price in first-tier cities has turned positive, with Shanghai's listing price increasing by 0.11% week-on-week [23] New Housing Weekly Tracking - New home transactions in Beijing, Shanghai, and Shenzhen have shown continued growth, with Beijing's week-on-week increase at 32% and Shenzhen at 27% [57] - The inventory of new homes in first-tier cities continues to decline, with a week-on-week decrease of 0.7% [59] Investment Recommendations - Investors are encouraged to focus on national real estate companies or local state-owned enterprises that are deeply engaged in the Beijing and Shanghai markets, given their leading performance [3][6]

New Housing Market Insights - The new housing market's sentiment is declining but at a slower pace, with key cities showing a month-on-month increase in transaction volume, although still weaker than the same period last year[5] - In the week of March 14-20, the new housing transaction area in 47 cities reached 3.609 million square meters, reflecting a month-on-month increase of 6.1% but a year-on-year decline of 22.3%[5] - The disparity in performance between new and second-hand housing may be attributed to the second-hand market absorbing some of the demand for improvement[5] Second-Hand Housing Market Insights - The sentiment in the second-hand housing market has stabilized at a low point, with transaction volume in 22 cities increasing by 10.0% month-on-month, but down 8.9% year-on-year, indicating a narrowing decline compared to the previous week[8] - As of March 21, the real-time signing data shows that the second-hand housing transaction volume in 26 key cities has increased by 12% compared to the same period last year[8] - Notably, Shanghai's second-hand housing weekly online signing volume reached a new high since 2021, with cities like Xuzhou, Nantong, Hefei, Wuxi, and Nanchang showing significant improvements compared to last year[8] Risk Factors - Potential risks include an unexpected decline in housing prices, exceeding anticipated debt risks for real estate companies, and a macroeconomic downturn that could be worse than expected[3][11]

Investment Rating - The investment rating for the real estate industry is "Outperform the Market" (maintained) [3][45]. Core Insights - The current high-frequency data is at a critical point between "good" and "bad," lacking sufficient evidence to determine future trends, which does not change the bearish outlook but also does not constitute a bullish barrier [4][5]. - The report suggests that the real estate industry is likely at a bottoming phase, with a low probability of a panic-style decline similar to Q4 2025, even if data weakens [5][39]. - Short-term, the real estate sector's high-frequency data does not support a consensus on future price trends, making significant price fluctuations in real estate stocks unlikely [5][41]. - Long-term, the valuation levels in the real estate sector are considered reasonable, reflecting pessimistic expectations from policies and fundamentals, with potential for recovery if the decline in second-hand housing prices narrows [5][41]. Summary by Sections Market Performance - Overall price performance is weaker than the same period last year, but certain cities have seen price rebounds [4]. - Transaction volumes are stable, with an increasing proportion of low-priced second-hand homes [4]. - Buyer sentiment remains cautious, while seller panic is diminishing [4]. Transaction Data - As of March 15, 2026, the 7-day moving average transaction area for new homes in 30 cities is down 7% year-on-year, with significant variances across major cities [6]. - The cumulative transaction area for new homes in 30 cities is 11.26 million square meters, down 22% year-on-year [6]. - The 7-day moving average transaction volume for second-hand homes in 18 cities is down 15% year-on-year, with cumulative transactions down 8% [8]. Price Trends - The average price of second-hand homes in 44 cities is 13,208 yuan per square meter, with a month-on-month decline of 0.3%, which is better than the same period in the past two years [17]. - In core cities, low-priced properties remain the mainstay of transactions, with significant proportions of sales occurring below certain price thresholds [24]. Buyer and Seller Sentiment - Buyers are transitioning from extreme caution to a more rational approach, showing readiness to act when conditions are favorable [39]. - Sellers are adjusting expectations, with a decrease in listing volumes and narrowing negotiation spaces, particularly in major cities [39].

Investment Rating - The industry investment rating is "Outperform the Market" [8] Core Insights - The report highlights that the decline in housing prices has narrowed, indicating a potential "small spring" in the market [1][3] - In January-February 2026, the national real estate investment and sales data showed a year-on-year decline in sales area and sales amount of 13.5% and 20.2%, respectively, which is a larger decline compared to the full year of 2025 [6] - The report suggests that with the increase in quality project launches in key cities in March and April, market activity is expected to improve, warranting attention to the performance of the "small spring" [6] Summary by Sections Sales Performance - In January-February 2026, the sales area and sales amount of commercial housing decreased by 13.5% and 20.2% year-on-year, respectively, with the decline in sales amount being more pronounced than the previous year's full decline of 12.6% [6] - The sales price index for 70 large and medium-sized cities showed a month-on-month decline of 0.3% for commercial housing and 0.4% for second-hand housing, which is a narrowing of the decline compared to January [6] Investment Trends - National real estate investment in January-February 2026 decreased by 11.1% year-on-year, a narrowing of the decline by 6.1 percentage points compared to the full year of 2025 [6] - New construction starts fell by 23.1% year-on-year, while completions dropped by 27.9%, indicating continued low levels of activity in the sector [6] Financial Health - The report notes that the funds available to real estate developers decreased by 16.5% year-on-year, with domestic loans down by 13.9% and personal mortgage loans down by 41.9% [6] - The overall investment stability is still dependent on improvements in sales and funding [6] Investment Recommendations - The report recommends focusing on three main lines: 1. Real estate companies with lighter historical burdens and strong product capabilities, such as China Resources Land and Poly Developments [6] 2. Hong Kong real estate companies benefiting from the stabilization of the Hong Kong market [6] 3. Quality enterprises in sub-sectors like brokerage and commercial operations [6]