China Real Estate Equities Day 2 tour wrap: More policies to anchor recovery China Centaline roundtable – more policies to reinforce market stabilization. We had a roundtable discussion with Mr. LIU Yuan, Vice President of Property Research at Centaline, to discuss the latest housing market dynamics. Contrary to the market view, he believes more policies will be announced to reinforce this recovery cycle. In spite of a pullback in April, Mr Liu's tone is more optimistic and he is confident that tier-1 and t ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Recent land market data indicates "green shoots" with higher land prices in major cities and increased land transactions, suggesting potential recovery in the property sector [5][6][7] - Despite these signs, the report cautions that they do not predict an immediate rise in property construction due to ongoing challenges in local government financing and land availability [5][6][38] - The property sector remains critical to China's GDP, accounting for approximately 19% of GDP in 2024, down from a peak of around 27% in 2020 [8][41] Summary by Sections Land Market Dynamics - Land sales data has shown recent improvements, with land prices rising in Tier-1 and some Tier-2 cities, while lower-tier cities continue to struggle [13][14] - Local government financing vehicles (LGFVs) accounted for 70% of total land sales volume in 2024, indicating a reliance on these entities for revenue generation rather than construction [5][23][24] Supply-Demand Mismatch - There is a persistent supply-demand mismatch across city tiers, with large cities experiencing a decline in land sales volume since 2021, while lower-tier cities face significant challenges from population outflows and high housing inventory [29][30] Government Revenue and Fiscal Implications - Government land sales revenue is expected to contract by 5-10% in 2025, reflecting ongoing economic challenges and the impact of US tariffs [41][42] - The report anticipates that property construction and investment have not yet reached their lowest point, projecting a continued drag on GDP growth from the property sector [41][38] Future Outlook - Recent stabilization in land prices in major cities may help anchor home prices, particularly for quality homes, but a broader recovery in home prices is still distant [41][44]