Core Viewpoint - The second quarter's decline in premium rates does not overshadow the heat of quality residential land, and the supply of land is expected to continue optimizing and improving in the second half of the year [2][8]. Supply and Demand - The supply of land in June reached 52.53 million square meters, a month-on-month increase of 9%, but a year-on-year decrease of 12.2%. The transaction area was 45.7 million square meters, down 4% year-on-year, while the transaction amount was 157.3 billion yuan, up 22% year-on-year [5][11][16]. - The average premium rate in June fell to 4.2%, with first and second-tier cities seeing significant declines, both around 5%, marking the lowest levels since 2025 [6][19]. - In terms of distribution, first and second-tier cities saw increases in transaction area by 108% and 33% respectively, while third and fourth-tier cities experienced a 15% decline [7]. Market Heat - The average premium rate for June was 4.2%, continuing its downward trend. The premium rates in first and second-tier cities dropped to around 5%, while third and fourth-tier cities fell by 1.3 percentage points to 2.7% [19][20]. - Despite the overall decline in premium rates, individual high-quality land parcels continue to attract high premiums, particularly in core cities like Shanghai and Chengdu, as well as in some third and fourth-tier cities [8][9]. Future Outlook - In the second half of 2025, local governments are expected to further implement "controlling quantity and improving quality" in the land market, which will support the reduction of real estate inventory [9][20]. - The completion of urban renewal projects in the first half of the year is anticipated to lead to an increase in the supply of quality core land parcels in the second half, contributing to a more stable transaction scale and improved supply-demand expectations [9][20]. Key Land Parcels - In June, several high-value land parcels were sold, with Shanghai and Beijing each having parcels with transaction values exceeding 5 billion yuan. The highest total price was for a parcel in Shanghai's Baoshan district, totaling 8.195 billion yuan with a premium rate of only 1.2% [24][26]. - The average floor price in the first-tier cities reached 3,443 yuan per square meter, with a month-on-month increase of 23% and a year-on-year increase of 27% [16].

Core Insights - The current real estate market is experiencing a shift, with a focus on the second-hand housing market and its transaction structure, particularly in major cities like Shanghai, Beijing, and Shenzhen [2][24][32] Group 1: Transaction Trends - The proportion of transactions under 3 million yuan is increasing, with Beijing seeing the most significant rise from 35% to 46% over the past year, while Shanghai and Shenzhen increased by 2% and 7% respectively [6][8] - The average transaction price for second-hand homes has decreased, with Shanghai dropping from 2.1 million yuan to 1.96 million yuan, and similar declines observed in Beijing and Shenzhen [8][9] - In second-tier cities, the 2 million yuan price point is critical, with cities like Chengdu and Nanjing seeing significant increases in transactions below this threshold [11][14] Group 2: Demand for Larger Units - There is a notable increase in the transaction volume of larger units (over 130 square meters) in cities like Shenzhen, where the proportion of such transactions has reached a five-year high [15][19] - The demand for larger homes is driven by changing family structures and lifestyle upgrades, particularly among families with multiple children [23][31] Group 3: Inventory and Pricing Pressure - The inventory of second-hand homes is rising, with cities like Chengdu seeing a 45.9% increase in listings over six months, leading to increased competition and downward pressure on prices [24][27] - The average price of second-hand homes across 100 cities has dropped by 7.24% year-on-year, indicating a continued decline in the market [28][30] Group 4: Market Outlook - The overall second-hand market is in a phase of weak recovery, with demand entering a new adjustment period, characterized by buyer hesitation and a tug-of-war between buyers and sellers [32][33] - Some cities are showing signs of improvement, with stable transaction volumes and manageable inventory levels, which could help restore buyer confidence [32][33]

Core Viewpoint - Since 2025, the real estate market has stabilized, with a weak recovery in new home transactions leading to a decline in both narrow inventory and the de-stocking cycle [1][2][24] Inventory and De-stocking Cycle - As of the end of April 2025, the narrow inventory in 50 cities reached 30.557 million square meters, a month-on-month decrease of 1% and a year-on-year decrease of 10% [2][24] - The de-stocking cycle for key cities has shown a fluctuating downward trend, reaching 20.98 months by the end of April, with a month-on-month decrease of 0.5% and a year-on-year decrease of 6% [1][2][24] - The supply constraints combined with transaction recovery indicate initial success in the industry's de-stocking efforts [2][24] City-Level Analysis - Inventory levels in first-tier cities remained stable at 4.155 million square meters, with a slight month-on-month increase of 2% and a year-on-year decrease of 0.25% [3][24] - Second-tier and third/fourth-tier cities saw a reduction in inventory, with both categories experiencing a year-on-year decline of 11% and 1% respectively [3][24] - The de-stocking cycle in first and second-tier cities has fallen below 20 months, while third and fourth-tier cities still face a cycle of 30 months, indicating ongoing inventory risks [3][24] Inventory Freshness - Over 54% of the inventory in 110 cities consists of supplies from 2020 to 2023, with the proportions for each year being 12%, 14%, 12%, and 16% respectively [9][12] - First-tier cities have a higher inventory freshness compared to second and third-tier cities, with 11.23% of their narrow inventory being newly supplied in 2022-2023, compared to 17.14% in lower-tier cities [8][12] - Cities like Shenzhen, Hangzhou, and Chengdu have a high proportion of fresh inventory, while cities like Wuxi are burdened with older stock [13][24] Product Segmentation - The main inventory segments are 100-120 square meters and 120-140 square meters, accounting for 24% and 20% of the total inventory respectively [15][18] - Three-bedroom units dominate the inventory, making up 52% of the total, while four-bedroom units account for 28% [21][24] - The trend shows a preference for larger three and four-bedroom units as new supply continues to shrink, potentially leading to inventory accumulation [21][24]

Group 1 - The decline in second-hand housing prices is perceived as an emotional issue rather than having a real impact on the economy, finance, or the real estate market [1] - The focus should be on first-hand housing, as issues in this sector can significantly affect the overall economy and people's livelihoods [2] - The real estate market's biggest challenge lies in managing first-hand housing inventory, as excess inventory can lead to broader economic problems [2] Group 2 - Second-hand housing is viewed as a stable asset that does not create systemic risks, as it is widely distributed among individuals rather than concentrated in corporations [1] - The sentiment around second-hand housing is often driven by speculation and fear, rather than actual market fundamentals [1] - The government is unlikely to intervene in the second-hand housing market, focusing instead on first-hand housing to alleviate inventory issues [2]

Core Viewpoint - The real estate market has stabilized since 2025, with new supply being restrained, leading to a weak recovery in transactions and a significant reduction in inventory levels, particularly in certain cities facing severe supply constraints [1][3][31]. Group 1: Inventory and Depletion Cycle - As of April 2025, the narrow inventory across 50 cities has decreased to 30.557 million square meters, reflecting a 1% month-on-month decline and a 10% year-on-year decline [3][4]. - The depletion cycle has shown a downward trend, reaching 20.98 months by the end of April 2025, with a 0.5% month-on-month decrease and a 6% year-on-year decrease [4][7]. - Inventory levels in first-tier cities remain stable, while second and third-tier cities have seen a reduction, with depletion cycles in first and second-tier cities dropping below 20 months, while third and fourth-tier cities still face cycles of around 30 months [7][31]. Group 2: Freshness of Inventory - Approximately 54% of the inventory consists of supply from 2020 to 2023, with first-tier cities exhibiting significantly higher freshness compared to second and third-tier cities [10][14]. - Cities like Shenzhen, Hangzhou, and Chengdu have a high proportion of fresh inventory, while cities like Wuxi are burdened with older stock, with nearly 30% of inventory being from over ten years ago [17][32]. Group 3: Area Segmentation - The primary inventory is concentrated in the 100-140 square meter range, with 100-120 square meters and 120-140 square meters accounting for 24% and 20% of the total inventory, respectively [20][23]. - Smaller units (below 70 square meters) and larger units (above 180 square meters) have seen a decrease in inventory share, with the 70 square meters and below segment dropping to around 8% by April 2025 [22][24]. Group 4: Housing Type - Three-bedroom units dominate the inventory, making up 52% of the total, while four-bedroom units account for 28% [27][28]. - The inventory pressure for two-bedroom units is notably higher in second and third-tier cities compared to first-tier cities, where three and four-bedroom units are more prevalent [28][31]. Group 5: Future Outlook - Three categories of cities are identified as facing significant short-term supply constraints: 1. Hot cities like Shanghai, Hangzhou, and Chengdu with low inventory and short depletion cycles [31][32]. 2. Second and third-tier cities with high old inventory and long depletion cycles, such as Hohhot and Wuxi [32]. 3. Cities with mismatched supply and demand, like Guangzhou and Dalian, where inventory structures do not align with transaction structures [35].