Summary of China Property Weekly Wrap Industry Overview - The report focuses on the **Chinese property market**, highlighting transaction trends and market sentiments during Week 33. Key Highlights - **Inventory Buyback Initiatives**: Policymakers are preparing to mobilize central State-Owned Enterprises (SOEs) to purchase unsold homes from distressed property developers. The People's Bank of China's Q2 monetary policy report emphasizes the need to enhance existing supportive measures, including the ARH relending program, which has an issuance balance of Rmb16.2 billion by the end of Q3 2024 against a total quota of Rmb300 billion, aimed at stabilizing the housing market and optimizing financing systems for the property sector [1][2]. Market Performance - **Transaction Volume**: - Primary market transactions increased by **9% week-over-week (wow)**, while secondary market transactions decreased by **2% wow**. Year-to-date (YTD) figures show a **17% decline** in primary market volume and a flat performance in the secondary market compared to the previous year [2][5]. - New home search activities remained unchanged, while secondary home visitor traffic improved by **3% wow**. However, secondary price expectations from agents weakened by **0.7 percentage points (pp) wow**, marking a second consecutive week of softening [2][5]. Key Data Points - **Sales Performance**: - New home sales volume averaged **+9% wow** but **-17% year-over-year (yoy)**, with tier-3 cities and the Pearl River Delta (PRD) outperforming other tiers. - Secondary transactions averaged **-2% wow** and **-1% yoy**, with negative price appreciation expectations from agents but not homeowners [5][6]. - Year-to-date primary Gross Floor Area (GFA) sold was down **7% yoy**, while secondary GFA sold was up **12% yoy** on a city-average basis [5][6]. Inventory and Valuation Insights - **Inventory Levels**: - Inventory balance decreased by **0.1% wow** and **4.0% from end-2024 levels**, with inventory months at **25.8**, slightly below the average of **26.0 in July 2025** [7][35]. - **Valuation Trends**: - Offshore developers saw an average share price increase of **6% wow**, outperforming the MSCI China index, while onshore developers averaged **2% wow**. The average discount to end-2025 estimated Net Asset Value (NAV) is **29% for offshore** and **18% for onshore developers** [7][46][48]. Completions and New Starts - **Completions**: - A projected **20% yoy decline** in completions for August 2025, compared to a **29% decline** in July 2025 [40]. - **New Starts**: - Expected mid-teens level yoy decline in new starts for August, based on land sales trends and cement shipment ratios [7][40]. Implications for Home Appliances and Other Sectors - Home appliance sales are likely to remain flat yoy in August, based on secondary sales trends in approximately 20 cities [7]. Conclusion - The Chinese property market is experiencing a plateau in transaction volumes, with mixed performance across different city tiers. Policymakers are taking steps to stabilize the market through inventory buybacks and supportive monetary policies. Valuations remain attractive, with significant discounts to NAV, indicating potential investment opportunities in the sector [1][2][7][48].

Summary of China Property Weekly Wrap Industry Overview - The report focuses on the **Chinese property market**, highlighting transaction trends and market sentiments during Week 33 of 2025. Key Highlights - **Inventory Buyback Initiatives**: Policymakers are preparing to mobilize central state-owned enterprises (SOEs) to purchase unsold homes from distressed property developers. The People's Bank of China's Q2 monetary policy report emphasizes the need to enhance existing supportive measures, including the ARH relending program, which has an issuance balance of Rmb16.2 billion by the end of Q3 2024 against a total quota of Rmb300 billion, aimed at stabilizing the housing market and optimizing financing systems for the property sector [1][2]. Market Performance - **Transaction Volumes**: - Primary market transactions increased by **9% week-over-week (wow)** but decreased by **17% year-over-year (yoy)**. - Secondary market transactions decreased by **2% wow** and **1% yoy**. - Overall, the market sentiment remained stable, with new home search activities unchanged week-over-week, while secondary home visitor traffic improved by **3% wow**. However, secondary price expectations from agents weakened by **0.7 percentage points (pp) wow**, marking the second consecutive week of softening [2][5]. Key Data Points - **Sales Performance**: - New home sales volume averaged **+9% wow** and **-17% yoy**, with tier-3 cities and the Pearl River Delta (PRD) outperforming. - Secondary transactions averaged **-2% wow** and **-1% yoy**, with negative price appreciation expectations from agents but not homeowners. - Year-to-date (YTD) primary gross floor area (GFA) sold was down **7% yoy**, while secondary GFA sold was up **12% yoy** [5][25]. Inventory and Valuation Insights - **Inventory Levels**: - Inventory balance decreased by **0.1% wow** and **4.0% from end-2024 levels**, with inventory months at **25.8** (compared to an average of **26.0** in July 2025) [35]. - **Valuation Trends**: - Offshore coverage developers saw an average share price increase of **6% wow** (compared to **3% for MSCI China**), with CR Land and Greentown outperforming at **+11%** and **+10% wow**, respectively. Onshore developers averaged **+2% wow** [46][48]. Completions and New Starts - **Completions**: - The GSPC tracker indicates a **20% yoy decline** in completions for August 2025, compared to a **29% yoy decline** in July 2025 [40]. - **New Starts**: - New starts are expected to record a mid-teens level yoy decline in August, based on land sales trends in 300 cities and a **+2pp wow** increase in nationwide cement shipment ratios [40]. Implications for the Market - The report suggests that property sales in approximately **75 cities** indicate a likely **17% yoy decline** in presales for top-100 developers in August, compared to a **27% decline** in July [7]. - The overall sentiment in the property market remains cautious, with ongoing challenges in sales and price expectations, despite some positive movements in specific segments [6][7]. Conclusion - The Chinese property market is experiencing a plateau in transaction volumes, with mixed performance across different city tiers. Policymaker interventions and market stabilization efforts are crucial as the sector navigates ongoing challenges and seeks to transition to a new development model [1][2][6].

Market Trends - South Korea's property market showed signs of stabilizing [1] Government Policy Impact - The government undertook steps to cool demand in the property market [1]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Manufacturing PMI in China softened from 50.3 in November to 50.1 in December, while non-manufacturing PMI increased significantly from 50.0 to 52.2, indicating a positive trend in the services and construction sectors [1][2] - Property sales in top-tier cities have shown notable increases, with new home sales up nearly 40% year-over-year and existing home sales rising more than 50% year-over-year, suggesting a stabilization in the property market led by these cities [3][7] - The report highlights a significant inventory overhang in lower-tier cities, indicating that national property prices may have further room to decline, and homebuilding activity is expected to remain depressed for an extended period [3] Summary by Sections Manufacturing Sector - The official NBS manufacturing PMI decreased slightly, indicating a softening in manufacturing activity, while the non-manufacturing PMI showed improvement, particularly in construction and services [1][2] Property Market - High-frequency tracking indicates that property sales in major cities are significantly higher than the previous year, with a 40% increase in new home sales and over 50% in existing home sales [3][7] - The report suggests that the recovery in the property market is primarily driven by top-tier cities, while lower-tier cities continue to face challenges due to excess inventory [3] Policy Developments - Recent policy announcements indicate a commitment to accelerate credit extension and potential cuts to the reserve requirement ratio (RRR) and policy rates in early 2025, reflecting a proactive approach to economic management [8]