Core Viewpoint - The real estate market in China is experiencing significant challenges, with a decline in both sales volume and prices, particularly affecting families with multiple properties [1][3]. Market Overview - In 2023, the total sales area of commercial housing in China was approximately 1.117 billion square meters, representing a year-on-year decrease of 8.5%, the lowest level since 2012 [1]. - The sales revenue for commercial housing was about 11.66 trillion yuan, down 6.5% year-on-year, reverting to levels seen in 2016 [1]. - The average price of second-hand residential properties in 100 cities was 15,034 yuan per square meter, reflecting a year-on-year decline of 3.66%, marking ten consecutive months of price drops [1]. Challenges for Multi-Property Owners - Property values are expected to continue declining, with significant price drops observed in major cities. For instance, in Shanghai, average price declines in central areas reached 20% to 30% [7]. - Holding costs for multiple properties are rising, as owners face increasing expenses such as property management fees, heating costs, and maintenance funds, which are compounded by inflation [9]. - The difficulty in liquidating second-hand properties is increasing, especially in lower-tier cities facing price drops and population outflows. Even in first-tier cities, the surge in listings makes sales challenging, often requiring substantial price reductions to attract buyers [10]. - The pressure to repay mortgages is intensifying due to economic downturns, leading to potential risks of default and loss of properties if owners struggle to meet repayment obligations [12].

Core Viewpoint - The Chinese real estate market is experiencing a significant downturn, with many homeowners facing substantial losses as property values decline sharply from previous highs [1][3][5]. Group 1: Market Conditions - The domestic real estate market is characterized by a long-standing oversupply, with 120 million vacant homes available, enough to accommodate 300-400 million people [3]. - The proportion of families owning one or more properties is 96%, with 41.5% of families owning multiple properties, indicating a saturated market after 20 years of growth [3]. - Despite various government measures to stabilize the market, including relaxed purchase restrictions and reduced mortgage rates, the effectiveness of these policies has been limited, leading to a decline in transaction volumes [3]. Group 2: Price Trends - After three years of decline, property prices have reverted to levels seen in 2016, with significant drops in major cities: Beijing's second-hand home prices have fallen by approximately 30%, Shanghai by 30.6%, and Shenzhen by 38.7% [5]. - In second-tier cities like Nanjing and Chongqing, average second-hand home prices have also decreased by about 38.5% [5]. - Over half of the families who purchased homes since the price surge in 2016 are now "trapped" in their investments due to the significant drop in property values [5]. Group 3: Buyer Sentiment - Many potential buyers are now cautious, recognizing the downward trend in property prices and opting to wait for a more favorable market before making purchases [9]. - Three main groups of individuals who have not purchased homes include those who understand the future price trends, low-income earners unable to afford high property prices, and young people who prefer renting over buying [9][11]. - Young individuals are increasingly choosing to rent, as the cost of homeownership is often unsustainable compared to their income levels, with many believing that waiting for a more reasonable price point is a better strategy [11].