The top 3 factors that boost household confidence to buy properties are: 1) lower mortgage rates; 2) job promotion/salary increment; and 3) lower down-payment requirements (Figure 20Job prmtion/salry incemtas fcortbs nfidec). This is in line with our sector outlook, where we highlighted the mortgage rate cut is one of the key measures to property price stabilization, and a substantial mortgage cut by over 130bp or a mortgage subsidy of 130bp on existing mortgage balance (Rmb38trn) is needed to motivate hous ...

Summary of China Property Weekly Wrap Industry Overview - The report focuses on the **Chinese property market**, specifically analyzing the performance of primary and secondary real estate transactions in the context of fiscal year 2025 (FY25) and the outlook for 2026. Key Highlights 1. **Policy Initiatives**: - The Ministry of Housing and Urban-Rural Development (MOHURD) has outlined priorities for 2026 aimed at stabilizing the property market, including: - City-specific measures to control new supply and reduce inventory through urban renewal and buybacks of unsold homes for affordable housing [1] - Promotion of high-quality housing initiatives [1] - Enhancement of the "white-list" financing mechanism to support developers' financing needs [1] - Empowerment of local governments to adjust housing policies to support demand [1] - Advancement of new development models to mitigate delivery risks [1] 2. **Local Policy Adjustments**: - Beijing has eased local home purchase restrictions, allowing families with multiple children to buy an additional home within the 5th Ring Road [2] - Potential adjustments in home-purchase rules in other Tier-1 cities like Shanghai and Shenzhen are anticipated [2] 3. **Market Activity**: - Transactions in the primary market improved by **29% week-over-week (wow)**, while the secondary market saw a **5% wow** increase, despite year-over-year (yoy) declines of **-16%** and **-1%** respectively [3][8] - The ratio of units with price cuts narrowed to **15.4 times** those with price increases in December, down from approximately **18 times** in the previous months [3] 4. **Sales and Inventory Data**: - New home sales volume was **-37% yoy**, with search activities down **1.1% wow** [4] - Inventory levels increased by **0.1% wow** but decreased by **3.5%** from the end of 2024, with inventory months at **28.4** [20] 5. **Valuation Insights**: - Stronger state-owned enterprise (SOE) developers experienced a **-1% wow** decline in share prices, while privately-owned enterprises (POE) saw a **-2% wow** drop [32] - Offshore developers are trading at an average **37% discount** to end-2026 estimated net asset value (NAV) [32] 6. **Sales Forecasts**: - Property sales in approximately **75 cities** suggest that top-100 developers' presales are likely to decline **41% yoy** in December, compared to **-36%** in November [8] - Completions are expected to show a **mid-single-digit percentage improvement** yoy in December, with a **-10% yoy** decline projected for FY25 [24] 7. **Market Sentiment**: - Secondary market sentiment remains steady, with subscription-based sales and visitations flattening [3] - Home appliance sales are likely to record a yoy decline in December based on trends in **20 cities** [8] Additional Insights - The report indicates a potential steepened decline in new starts in December, based on land sales trends and cement shipment ratios [8] - The overall market sentiment reflects cautious optimism due to policy adjustments and localized easing measures, which may influence investor focus in the near term [2][3] This summary encapsulates the critical insights and data points from the China Property Weekly Wrap, providing a comprehensive overview of the current state and outlook of the Chinese property market.

Summary of China Property Monthly Tracker Industry Overview - The report focuses on the **Chinese property market**, highlighting significant declines in various metrics such as average selling prices (ASP), primary sales, new starts, and completions in November 2025 compared to previous years. Key Market Indicators - **Primary Sales**: - Volume declined by **17%** year-over-year (yoy) - Value declined by **25%** yoy, which was largely in line with expectations [2][11] - **New Starts**: - Fell sharply by **28%** yoy, marking the second consecutive month of decline [11] - **Completions**: - Declined by **25%** yoy, undershooting estimates [11] - **Fixed Asset Investment (FAI)**: - Reached its lowest level since 2012, declining by **30%** yoy [2][11] - **Secondary Transaction Volumes**: - Decreased by **24%** yoy [2][11] Price Trends - **Average Selling Prices (ASP)**: - Nationwide ASP declined by **9.5%** yoy in November [21] - Primary market ASP showed a slight decline of **0.4%** month-over-month (mom), while secondary market ASP declined by **0.7%** mom [11][28] Developer Activity - Developers' land acquisition spending moderated to **21%** of contract sales in November, with an average project-level gross profit margin (GPM) of **25%** [12][71] - The land market showed signs of weakness, with land sales volume and value declining by **27%** and **37%** yoy, respectively [35] Future Expectations - For December 2025, expectations include: - Continued price weakness and a **low-teens to low-twenties %** yoy decline in sales volume and value [3][13] - A potential positive yoy for completions, but a steeper decline in new starts [3][13] - Secondary transaction volumes expected to decline by **high-twenties %** yoy [3][13] Policy and Market Sentiment - Key areas to watch include: - Potential large-scale mortgage interest subsidies and commercial mortgage rate cuts [4][8] - Removal of housing purchase restrictions in core districts of Tier-1 cities [4][8] - Signs of rent stabilization in high-tier cities [4][8] - The overall demand score for the property market was **37 out of 100**, indicating a challenging environment for developers and homebuyers [53][55] Developer Liquidity - Developers are facing a funding gap estimated at **Rmb3.2 trillion** for 2025, with liquidity remaining tight [54][57] - New funding sources for developers increased by **21%** mom and **29%** yoy in November, indicating some recovery in financing [63] Conclusion - The Chinese property market is experiencing significant challenges, with declining sales, prices, and construction activity. Developers are under pressure due to liquidity issues and a challenging market environment. Future policy measures and market sentiment will be crucial in determining the trajectory of the market moving forward.

Summary of Conference Call on China Property Market Industry Overview - The conference call focuses on the **China Property** market, highlighting the ongoing challenges and potential recovery strategies within the sector. Key Points and Arguments Market Conditions - **Price Stabilization**: Coordinated policies in both property and financial sectors are seen as essential to break the downward price spiral, with a projected timeline of **2 years** for stabilization [1][2] - **Home Price Expectations**: A survey by PBoC indicates only **9%** of depositors expect housing prices to rise in **2026E**, reflecting a significant lack of confidence [1] - **Secondary Listings**: The market is experiencing a surge in secondary listings, with **4.7 million units** expected in **2025**, leading to a **9% year-over-year** decline in secondary prices [1][11] Sales and Inventory Trends - **Sales Decline**: National sales are projected to drop by **11% year-over-year** to **Rmb 7.6 trillion**, with residential sales at **Rmb 6.8 trillion** [4] - **Inventory Levels**: Record-high inventory levels are noted, with **36 months** of new home inventory, necessitating approximately **2 years** to return to historical averages [1][11] - **Foreclosure Sales**: Foreclosure sales have been minimal, accounting for only **0.3%** of the secondary market, with **92,000 units** sold at an average discount of **24%** [1][11] Economic Impact - **Household Wealth**: Real estate constitutes **66%** of household wealth, indicating that home price fluctuations significantly impact consumer spending and GDP [1][2] - **Local Government Revenue**: Land sales have decreased to **25%** of local government revenue, down from a peak of **44%** in 2020, indicating a shift in financial reliance [1][2] Future Projections - **Price Decline**: Home prices are expected to decline by **3-5%** in **2026E**, with top cities stabilizing first by the end of that year [9][11] - **New Home Supply**: New home supply is anticipated to contract further, with land acquisition and starts expected to drop by **10%** and **15%** year-over-year, respectively [4][9] - **Demand-Side Stimulus**: A new round of local stimulus is anticipated in **4Q25**, although its effectiveness in altering price expectations remains uncertain [2][4] Regulatory Environment - **Resale Restrictions**: Many cities have removed resale restrictions, leading to increased secondary supply and impacting price expectations [1][40] - **Market Regulation**: There is a focus on regulating online property information and media to stabilize market expectations [2] Additional Important Insights - **Investment Units**: An estimated **6.7 million investment units** are expected to enter the market, exacerbating supply pressures due to eased resale restrictions [1][42] - **Vacancy Rates**: A **12%** vacancy rate translates to approximately **36 million vacant units**, indicating significant overcapacity in the market [1][11] - **Long-Term Structural Changes**: The shift towards higher-quality GDP growth is seen as a long-term structural change, with property contributing around **10%** to GDP in **2026E** [1][2] This summary encapsulates the critical insights from the conference call regarding the current state and future outlook of the China property market, emphasizing the challenges and potential recovery strategies.

Summary of the Conference Call on China Property Sector Industry Overview - **Industry**: China Property Sector - **Event**: Central Economic Work Conference (CEWC) held on December 10-11, 2025 Key Points and Arguments 1. **Risk Management and Market Stabilization**: - The conference emphasized the need to take proactive steps to defuse risks in key areas and stabilize the property market through city-specific policies aimed at controlling new supply, reducing inventory, and optimizing existing supply [1][2][7] - The focus is on encouraging inventory purchases for social housing and deepening the reform of the housing provident fund [1][7] 2. **Policy Tone and Intentions**: - Compared to previous meetings, the tone in December 2025 is seen as more proactive than in April and July 2025, but less decisive than in December 2024 [2] - The language used indicates a shift from a strong push for stabilization to a more moderate approach, recognizing the imbalance of weak domestic demand against strong supply [2] 3. **Local Stimulus and Monetary Policy**: - A new round of local demand-side stimulus is anticipated, including home purchase and mortgage interest subsidies, although these are not expected to significantly alter home price expectations due to abundant supply [3] - There is a low likelihood of targeted monetary easing or pro-leverage initiatives in the near term, but urban renewals and REIT approvals are expected to accelerate [3] 4. **Market Reactions and Sales Outlook**: - The property sector experienced a share price correction in early December due to weak sales and price declines, particularly in Tier 1 cities, alongside expectations of policy easing following Vanke's debt extension [4] - A short-lived policy-driven rebound in share prices is expected, with continued soft sales projected for Q4 2025 and limited improvement in household confidence [4] 5. **Investment Recommendations**: - Analysts suggest late December as a better entry point for reviewing the sector after the recent price corrections, with top picks including Jinmao, C&D, and CRL [4] Other Important Insights - The conference highlighted the importance of stabilizing investment and resolving local government debt risks while maintaining a necessary fiscal deficit and ensuring stable economic growth [1][7] - The need for a moderate recovery in price levels and stabilization of investment from further decline was acknowledged, indicating a cautious approach to future developments in the property market [2][3] This summary encapsulates the critical discussions and insights from the conference call regarding the current state and future outlook of the China property sector, emphasizing risk management, policy intentions, and market dynamics.

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]