Core Viewpoint - The real estate transaction model in China is undergoing a significant transformation, moving away from cash transactions to a regulated system that emphasizes electronic payments and transparency [1][3][13]. Group 1: Regulatory Changes - Starting from early 2025, a nationwide directive prohibits cash transactions in real estate, mandating that all payments must go through regulated bank accounts [3][4]. - Approximately 15% of real estate transactions involved cash in 2024, with this figure rising to 25% in smaller cities, primarily to avoid taxes or simplify processes [3][4]. - By June 2025, over 85% of cities in China will have established comprehensive real estate transaction fund supervision systems [4][5]. Group 2: Electronic Transactions - All aspects of real estate transactions, including contracts and payment receipts, will be fully electronic, creating a traceable transaction chain [5][6]. - The proportion of electronic real estate transactions reached 78% in the first quarter of 2025, a significant increase of 23 percentage points from the previous year [5][6]. Group 3: Cash Transaction Restrictions - Regulations now explicitly prohibit cash transactions for amounts exceeding 50,000 yuan, including down payments and agency fees [7][8]. - The shift to regulated payments has led to a 40% reduction in real estate transaction disputes [9][10]. Group 4: Impact on the Industry - Real estate agencies and developers face challenges in adapting to new regulations but also have opportunities to enhance their market position through compliance [12][13]. - The number of real estate agencies decreased by about 5% in the second quarter of 2025, primarily affecting those unable to adapt to the new regulatory environment [11][12]. Group 5: Future Outlook - By the end of 2026, it is projected that over 95% of real estate transactions will be electronic, marking a significant modernization of the industry [12][13]. - Innovative services, such as smart transaction assistants and dedicated banking services for real estate transactions, are emerging to facilitate this transition [12][13].