Core Viewpoint - The Chinese real estate market is experiencing a paradox where prices are declining significantly while government and financial institutions are continuously implementing measures to stimulate the market, yet these efforts have not yielded the expected results [1][3]. Group 1: Market Trends - The average decline in housing prices across the country has exceeded 30% [1]. - The government's measures include the removal of purchase restrictions in most areas and lowering mortgage rates and down payment ratios to historical lows [1]. - Despite these efforts, the anticipated recovery in the real estate market has not materialized [1]. Group 2: Challenges Ahead - Local governments are facing a significant drop in land transfer revenue, which fell to 2.85 trillion yuan in the first half of 2025, a year-on-year decrease of approximately 19.7% [5]. - Real estate companies are under pressure to sell off inventory, with a looming debt maturity peak of about 1.2 trillion yuan from late 2025 to 2026, raising concerns about potential bankruptcies [5][6]. - The non-performing loan rate for personal housing loans reached 0.7% in Q2 2025, an increase of 0.2 percentage points from the end of 2024 [6]. - The non-performing loan rate for real estate development loans was as high as 6.3% in the first half of 2025, up 1.5 percentage points from the beginning of the year [6]. Group 3: Price Adjustments and Market Dynamics - The long-term downward trend in housing prices is evident, with examples such as a property purchased for 4 million yuan in 2021 now valued at 2.56 million yuan [8]. - There is a trend of price declines in second and third-tier cities slowing down, while first-tier cities are beginning to experience similar declines [8]. - If the market does not stabilize, downward pressure on housing prices is expected to increase, aligning prices with local income levels and returning to their fundamental residential attributes [8].

Core Viewpoint - The real estate market is experiencing a paradox where property prices are declining significantly while various government policies aimed at stimulating the market are failing to yield satisfactory results [1][3]. Group 1: Market Trends - The average national property price has dropped by over 30%, with a notable decline in most cities except for core areas in first-tier cities [1]. - The downward trend in property prices is expected to continue, with increasing pressure linked to local residents' income and the return to housing as a necessity [7]. Group 2: Financial Implications - Local government revenue from land sales is projected to decline, with a forecast of 2.85 trillion yuan in the first half of 2025, representing a year-on-year decrease of approximately 19.7% [3]. - Real estate companies are facing increasing difficulties, with a looming debt maturity peak of about 1.2 trillion yuan from late 2025 to 2026, exacerbated by challenges in selling properties and recovering funds [4]. - The financial risks in the real estate sector are rising, with the non-performing loan rate for personal housing loans reaching 0.7% in Q2 2025, an increase of 0.2 percentage points from the end of 2024 [5]. Group 3: Recommendations for Stakeholders - For families looking to upgrade their homes, it may be wise to delay purchases until prices stabilize, potentially leading to lower costs [7]. - First-time homebuyers are advised to consider renting instead of buying, as current rental options may be more financially viable [7]. - Existing homeowners facing high mortgage pressures should negotiate with banks for lower interest rates to alleviate monthly payment burdens [9]. - Investors are cautioned against entering the property market at this time, with suggestions to diversify investments into fixed-income products, low-risk financial products, and moderate-risk funds to maximize returns while minimizing risks [9].