Core Viewpoint - The Chinese real estate market has entered a new adjustment cycle since the relaxation of pandemic controls in 2023, driven by long-accumulated factors, with significant declines in new home transactions and a surge in second-hand home listings [1][3]. Market Trends - From March 2023, both the transaction volume and area of new homes have decreased, while the second-hand housing market has seen a dramatic increase in listings, with cities like Chengdu and Chongqing surpassing 200,000 listings and Shanghai exceeding 180,000 by the end of June [1]. - By July, the second-hand housing price index for 100 cities showed a year-on-year decline in 96 cities, indicating a widespread downturn in the market [1]. Government Response - In response to falling housing prices, local governments have implemented various "market rescue" policies, including relaxing purchase and sale restrictions in many second and third-tier cities, reducing mortgage rates below 4%, and increasing housing fund loan limits to alleviate financial pressure on first-time buyers [1]. - The introduction of the "recognize house but not loan" policy aims to stimulate demand for improved housing, although the effectiveness of these measures has been limited [1]. Economic Impact - The decline in housing prices is attributed to two main factors: the impact of the pandemic leading to reduced incomes and job losses, which have diminished purchasing power, and the ongoing decrease in property values since the second half of 2021, eroding the "wealth effect" associated with real estate [3]. - The suggestion to utilize one-third of the 15 trillion yuan in household savings to stimulate real estate purchases and related consumption has sparked controversy, as many view these savings as essential for financial security [4]. Market Sentiment - Public sentiment reflects skepticism about the real estate market's future, with a common perception that the speculative nature of real estate investment is nearing its end, as indicated by a remark from a typical consumer highlighting the end of the "hot potato" game in real estate [6]. - Experts suggest that the government's recent policies aim to prevent drastic fluctuations in the market and achieve a "soft landing," but the long-term outlook remains uncertain, with the potential for continued adjustments in the housing market [6].

Core Viewpoint - The domestic real estate market in China is experiencing a long-term adjustment, with significant declines in both sales volume and prices, prompting various government policies aimed at stabilizing the market and encouraging home purchases [1][3]. Group 1: Market Trends - In 2024, the national sales area of commercial housing is expected to decrease by 11.3% year-on-year, with sales revenue declining by 15.7% [1]. - The new residential price index in 300 cities is projected to drop by 3.2% year-on-year, while the second-hand residential price index is expected to fall by 5.1%, marking the third consecutive year of overall price decline [1]. Group 2: Government Policies - Local governments, except for core areas in first-tier cities, have largely relaxed purchase restrictions and increased the upper limit for housing provident fund loans [3]. - Banks have reduced mortgage rates to below 3% and lowered down payment ratios to 1.5% [3]. - Tax authorities have provided exemptions on deed tax and value-added tax for homebuyers [3]. Group 3: Expert Opinions - Jack Ma emphasizes that housing should be for living, not speculation, suggesting that it may be a good time for first-time buyers and those looking to upgrade their homes [3][5]. - Li Ka-shing notes that the market is returning to rationality, and decisions should be based on personal financial situations and family needs when prices reach reasonable levels [5]. Group 4: Buyer Recommendations - For first-time and upgrading homebuyers, 2025 is seen as a favorable time to purchase due to a significant average price drop of 30% since 2022 and ongoing supportive policies [6]. - Speculative buyers are advised to "continue to observe" as there remains considerable market bubble, particularly in first-tier cities like Shanghai and Shenzhen, where price-to-income ratios exceed 40 [7][8]. - Many industry insiders believe that while core areas in first-tier cities may see price increases, third and fourth-tier cities have already experienced significant declines, suggesting a more stable environment for potential buyers in those areas [8].