Core Viewpoint - The October housing price data for 70 cities indicates a significant decline across both new and second-hand housing markets, reflecting a cooling market sentiment. New Housing Market - In first-tier cities, new housing prices fell by 0.3% month-on-month, with the decline accelerating by 0.2 percentage points compared to the previous month [1] - Second-tier cities experienced a 0.4% month-on-month decrease, also showing an increased decline of 0.1 percentage points from last month [1] - Third-tier cities saw a consistent decline of 0.4% month-on-month [1] - Even high-end improvement projects, which were previously expected to support prices, are now unable to withstand market pressures, indicating a shift in overall market expectations [4] Second-Hand Housing Market - The second-hand housing market is experiencing even steeper declines, with first-tier cities seeing a 1% month-on-month drop, maintaining the same decline as the previous month [5] - Second and third-tier cities recorded month-on-month decreases of 0.7% and 0.6%, respectively, with declines continuing to widen [5] - First-tier cities have entered a phase of "accelerated correction" since June, moving quickly towards their true market value, which significantly impacts overall market confidence [5] Market Heat - Nationwide, only 5 cities reported month-on-month increases in new housing prices in October, a stark contrast to 24 cities in March during a brief market upturn [7] - In the second-hand market, all 70 cities reported declines in October, compared to 10 cities experiencing price increases in March [7] - This dramatic shift illustrates the increasing market pressure in the second half of the year compared to the first half [7] Underlying Reasons and Future Outlook - The effects of earlier housing market easing policies have diminished, leading to market "antibody" development [8] - Anticipated stronger stimulus policies have not materialized, with the Loan Prime Rate (LPR) remaining unchanged [8] - The current price adjustments may be a deliberate strategy by higher authorities to allow housing to return to its residential purpose, eliminating past bubbles [11] - The market requires supportive policies to boost confidence, but there are no signs of such measures being implemented yet [11]

Core Insights - The overall real estate market returned to a low point in Q3 2025, with both new home supply and demand declining year-on-year and month-on-month. New home supply decreased by approximately 20% in Q3, with a cumulative year-on-year decline of 18% [1][2]. - New home transactions showed a steady decline, entering a period of weakness after the mid-year surge, despite favorable policies introduced in major cities like Beijing, Shanghai, and Shenzhen since August [1][9]. - The forecast for Q4 suggests a potential stabilization in new home transactions, with an expected year-on-year decline of around 10% for the entire year [1][28]. Supply Analysis - In Q3 2025, the supply of new homes in major cities saw a seasonal decline, with a year-on-year drop of 21% in July and August, and a cumulative decline of about 20% for the first three quarters [2][5]. - The supply in first-tier cities showed relative resilience, with a total supply area of 529 million square meters in Q3, a month-on-month decline of 15% but a year-on-year decline of only 3% [7]. - Second and third-tier cities continued to face pressure, with some cities like Chengdu and Tianjin showing signs of stabilization, while others like Wuhan and Nanjing experienced significant declines [7][15]. Transaction Insights - New home transaction volumes reached a near five-year low, with a total transaction area of 2,867 million square meters in Q3, reflecting an 18% year-on-year decline [9][12]. - The first-tier cities maintained a slight positive growth of 4% year-on-year in cumulative transactions, while second-tier cities saw a decline of around 10% [12][14]. - The second-hand housing market showed a relative stability with a cumulative transaction area of 5,225 million square meters, reflecting a year-on-year growth of 2% [17][20]. Price Trends - In August 2025, the sales prices of new residential properties in first-tier cities continued to decline month-on-month but showed a narrowing year-on-year decline, indicating a trend of marginal improvement [22][23]. - The price index for new homes in first-tier cities decreased by 0.9% year-on-year, with Shanghai experiencing a 5.9% increase, while other cities like Beijing and Guangzhou saw declines [22][27]. - The overall price trends suggest that while first-tier cities maintain higher price points, second and third-tier cities are experiencing a steady price correction due to previous oversupply [27][28]. Market Outlook - The market is expected to see a weak recovery in Q4 2025, driven by favorable policies and increased marketing efforts from real estate companies, although the overall transaction volume is likely to remain below previous highs [1][28]. - The differentiation between cities and projects will continue to intensify, with core urban areas likely to maintain higher demand while peripheral projects may struggle [29]. - The second-hand housing market is anticipated to attract more first-time buyers due to price advantages, further impacting the dynamics between new and second-hand homes [29].

Core Viewpoint - Since August, multiple regions have introduced new rounds of real estate optimization policies to stimulate the housing market, particularly in major cities like Beijing and Shanghai, aiming to lower purchasing barriers and boost housing demand [2][6][12]. Group 1: Policy Changes - On August 25, Shanghai followed Beijing's lead by implementing new policies that include adjustments to purchase limits, public housing funds, credit, and tax regulations, with a focus on easing restrictions in suburban areas while maintaining stricter controls in core urban zones [2][5]. - Beijing's recent policy changes represent the most significant relaxation of housing regulations in recent years, allowing families with certain qualifications to purchase homes without limits in areas beyond the Fifth Ring Road [3][4]. - The new policies in both cities are designed to address high inventory levels in suburban areas, with experts noting that the measures aim to activate demand for multiple property purchases and alleviate market inventory [5][6]. Group 2: Market Impact - The introduction of these policies is expected to stabilize the housing market, particularly as the traditional peak season for real estate, "Golden September and Silver October," approaches [12]. - Data indicates that after the implementation of similar policies in the past, such as the "930 policy" in Beijing, there was a notable increase in transaction volumes, suggesting that the current measures may also enhance market activity [10][11]. - Recent statistics show a rise in new housing transactions in Beijing following the policy changes, with a 41% increase in new residential sales and an 11% increase in second-hand home transactions during a specific period [10][11]. Group 3: Broader Context - Throughout 2023, over 370 real estate-related policies have been introduced nationwide, reflecting a concerted effort to stabilize the market amid ongoing adjustments and challenges [7][12]. - Despite the positive signs from policy implementations, the overall real estate market remains under pressure, with significant declines in investment and construction activity reported in the first seven months of the year [8][9]. - Analysts suggest that while the current policies may provide short-term relief, a more comprehensive recovery will require improvements in the macroeconomic environment and a reduction in the high inventory of second-hand homes [13].