Core Viewpoint - The real estate market in Chongqing has experienced significant price declines, with many properties now valued below their purchase prices, indicating a prolonged downturn in the housing market [1][2][5]. Market Trends - The average transaction prices for second-hand residential properties in Chongqing's top five districts have decreased by 13.5% to 24.4% compared to 2018 [2][11]. - The overall housing inventory in Chongqing is substantial, with a broad stock of approximately 42.7 million square meters, suggesting an estimated clearance period of about eight years [23][24]. Property Performance - Properties purchased by individuals like Xiao Yao have seen significant depreciation, with some homes losing up to 70% of their value since purchase [6][10]. - The second-hand housing market has seen a notable increase in listings, with over 280,000 properties available for sale, reflecting a 14.4% year-on-year increase [12][28]. Sales and Supply Dynamics - The supply of new residential properties has drastically decreased, with planned land supply for 2025 being only 35% of that in 2022, leading to a shift towards second-hand property transactions [28][29]. - The proportion of second-hand housing transactions has risen significantly, surpassing new home sales for the first time, indicating a changing market preference [28][29]. Economic Context - Despite the downturn in the real estate market, Chongqing's GDP has shown resilience, ranking fourth in China, which contrasts with the declining property prices [26][29]. - The government has implemented measures to alleviate the burden on homebuyers, including the cancellation of two-year resale restrictions and incentives for upgrading homes [28][29].

Investment Rating - The report indicates a downward trend in inventory levels across 50 key cities, with a 11% year-on-year decrease in narrow inventory as of January 2025 [3][27]. Core Insights - The real estate market is currently in a de-inventory cycle due to restricted new housing supply, with a narrow inventory of 31,093 million square meters as of January 2025, reflecting a 1% month-on-month decrease and an 11% year-on-year decrease [3][27]. - Key cities such as Guangzhou, Wuhan, and Nanjing are experiencing de-inventory cycles exceeding 20 months, indicating potential challenges in inventory clearance [3][27]. - Inventory structure analysis reveals that Guangzhou and Wuhan have a high proportion of inventory in the 100-140 square meter range, while Nanjing faces significant inventory pressure in the sub-70 square meter hotel-style apartments [27]. Summary by Sections Inventory Trends - The narrow inventory in 50 cities continues to decline, with a year-on-year decrease of 11% as of January 2025, and a de-inventory cycle projected to reach 21.53 months by the end of 2025 [3][27]. - Cities like Guangzhou, Wuhan, and Nanjing have de-inventory cycles that remain above 20 months, indicating ongoing challenges in inventory clearance [3][27]. Inventory Structure - In terms of area segments, Guangzhou and Wuhan's main inventory is concentrated in the 100-140 square meter range, while Nanjing has a significant backlog in the sub-70 square meter segment, primarily consisting of hotel-style apartments [7][27]. - The inventory pressure in Guangzhou and Wuhan is attributed to previous oversupply in the mid-sized segment, while Nanjing's pressure is mainly from the small-sized segment [7][27]. Regional Analysis - High inventory levels are noted in the peripheral areas of Guangzhou and Wuhan, such as the Zengcheng and Dongxihu districts, with inventory proportions reaching 23.12% and 14.28% respectively as of January 2025 [11][12]. - Nanjing's Jiangning district shows a balanced supply-demand situation, while the sub-70 square meter hotel-style apartments face significant oversupply, with inventory proportions at 29.2% compared to a transaction proportion of less than 10% in 2024 [23][27].