Core Viewpoint - The Chinese real estate market is undergoing significant changes in 2026, driven by government policies aimed at stabilizing housing prices and restoring consumer confidence in the face of declining market conditions [2][7]. Policy Measures - The government has introduced a series of unprecedented stimulus policies, including extending tax exemptions for home sales until the end of 2027 and reducing the down payment ratio for commercial properties from 50% to 30% [2][3]. - Local governments are also providing incentives, such as additional square meters for families with multiple children and subsidies to help with mortgage payments [3][5]. - The media's emphasis on housing as a major asset serves as a signal of the government's commitment to support the market [2]. Market Conditions - The real estate market is closely linked to overall consumer confidence, with the decline in housing values impacting spending in other sectors, such as luxury automobiles [5][7]. - National statistics indicate that new home prices in 70 major cities have been declining for 30 consecutive months, with second-hand home prices dropping for 31 months [8][10]. - The average price drop in first-tier cities has exceeded 35% from peak levels in 2021, with some areas experiencing declines of up to 40% [8]. Future Outlook - The expectation is that housing prices will continue to decline slowly, with a forecasted drop of 2-3% in 2026 for new homes nationwide [8][10]. - The market is expected to see a significant divide, where high-quality properties retain value while lower-quality properties face depreciation [10][11]. - The government is likely to continue implementing supportive policies, but the market dynamics have fundamentally shifted, requiring buyers to be more discerning [10][11].