Core Viewpoint - Longfor Group's recent mid-year performance announcement for 2025 highlights the significant impact of government policies on the real estate market, indicating a recovery phase followed by new challenges due to policy adjustments [2] Group 1: Market Conditions - The central government introduced a package of stimulus policies on September 26 last year to stabilize the real estate market, leading to a six-month recovery from October to March [2] - Starting in April, the market faced a new downturn as the stimulus policies were scaled back and the implementation of land reserve policies was slower than expected, putting pressure on the recovery observed in the second and third quarters [2] - The State Council's meeting in August emphasized the need to maintain the stability of the real estate market, with recent easing of purchase restrictions in cities like Beijing and Shanghai deemed necessary [2] Group 2: Future Outlook - The chairman and CEO of Longfor Group, Chen Xuping, stated that the stabilization of the real estate market is crucial for China's economic and financial stability, with short-term trends dependent on the strength of policy stimuli [2] - In the long term, there is optimism regarding the resilience of the Chinese real estate market, particularly in first- and second-tier cities where there is a strong demand for quality housing in prime locations [2] - The company believes that focusing on building quality homes and providing excellent products and services remains a worthwhile long-term business strategy [2]

Core Viewpoint - The recent housing price data from the National Bureau of Statistics indicates a significant downturn in the real estate market of first-tier cities in China, raising doubts about the effectiveness of policy stimuli aimed at stabilizing the market [1][11]. Group 1: Housing Price Trends - In May, the new housing prices in Beijing and Shenzhen decreased by 0.4%, while Guangzhou saw a decline of 0.8%, indicating a downward trend in the new housing market [4]. - Year-on-year comparisons show that new housing prices in Beijing, Shenzhen, and Guangzhou fell by 4.3%, 2.6%, and 5.8% respectively, suggesting that the first-tier cities are still in a downward trajectory [4]. - The second-hand housing market is even more concerning, with Guangzhou experiencing a significant drop of 6.6% year-on-year, while Beijing's decline remained under 1% [5]. Group 2: Shanghai's Unique Position - Shanghai's new housing prices increased by 0.7% month-on-month and 5.9% year-on-year, making it an outlier among first-tier cities where most are experiencing price declines [6]. - Despite Shanghai's resilience in new housing prices, its second-hand housing market showed a month-on-month decline of 0.7%, indicating a potential weakening of upward momentum [8]. Group 3: Policy Stimuli and Market Response - Recent government discussions emphasize the need for stronger measures to stabilize the real estate market, with proposals to lift restrictions on housing purchases in cities like Beijing and Shanghai [11][16]. - The effectiveness of these policies may be limited, as the overall market confidence remains low, particularly in cities like Guangzhou, which struggles to attract new buyers [15][16]. - Suggested measures include relaxing purchase restrictions in major cities and utilizing special bonds to buy back existing housing stock to alleviate inventory pressures [16].