Core Insights - The current real estate market in first-tier cities is experiencing a phenomenon of "panic selling," with a significant increase in property listings and a notable decrease in transaction volumes [1][5] - The overall trend indicates a downward trajectory for housing prices, driven by various factors including reduced demand for mortgages and ineffective government policies [3][7][8] Group 1: Panic Selling Phenomenon - In the past three months, there has been a 32.7% year-on-year increase in the number of second-hand homes listed in first-tier cities, while transaction volumes have decreased by 18.3% [1][5] - In addition to first-tier cities, second and third-tier cities are also witnessing a surge in listings, with cities like Chongqing exceeding 200,000 listings and some cities experiencing daily new listings that are five times the transaction volume [1][5] Group 2: Price Downward Trend - As of the first quarter of 2025, 53 out of 70 major cities in China have reported a month-on-month decline in second-hand housing prices, with 12 cities experiencing declines greater than 1.5% [5][7] - The significant drop in housing prices is attributed to the loss of profit-making opportunities in the market, prompting many investors to liquidate their assets [5][7] Group 3: Decline in Mortgage Demand - There has been a sharp decline in the demand for housing loans, with new long-term loans for households amounting to 382.7 billion yuan in the first quarter of 2025, a decrease of 123.5 billion yuan or 24.4% year-on-year [7] - The decline in demand is primarily due to residents' income levels being insufficient to support high housing prices and a general pessimism regarding future price trends [7] Group 4: Ineffectiveness of Government Policies - Since 2024, various government measures aimed at stabilizing the housing market, such as lifting purchase restrictions and lowering down payment ratios, have had limited success in reversing the downward trend in housing prices [8] - The current market adjustment is characterized by a longer cycle compared to previous downturns, with an average price drop exceeding 30% since 2021 [11] Group 5: Characteristics of Current Market Adjustment - The current market adjustment has lasted three years, indicating a longer cycle compared to past adjustments [11] - The sequence of price declines has been evident, with second and third-tier cities experiencing initial drops followed by first-tier cities [12] - A significant number of real estate companies are facing bankruptcy or restructuring, with 27 major firms reported to have declared bankruptcy or entered restructuring as of April 2025 [15]