Vi e w p o i n t | 15 Dec 2025 02:56:30 ET │ 15 pages China Property Nov NBS: Sharpest-ever Investment Drop; Time Needed to Stabilize CITI'S TAKE Nov NBS: weakness on all fronts; REI -30%yoy, a record-high — Nov-alone: [1] REI -30.3%yoy (Oct: -22.5%), the sharpest drop on record, with REI of Rmb0.5trn a monthly low since Apr-2012 (excl. CNY); [2] Completion -26%yoy (Oct: -28%); [3] Starts -28%yoy (Oct -29%); [4] Residential sales -28% (Oct: -25%), largest single month drop since May'24; resi GFA sold -19% ( ...

Core Points - The People's Bank of China announced a decrease in the Loan Prime Rate (LPR), with the 1-year LPR at 3% and the 5-year LPR at 3.5%, both down by 10 basis points from the previous month [1] - Major banks collectively lowered deposit rates, with a 5 basis point reduction in demand deposits and a 15 to 25 basis point reduction in fixed-term deposits [1] - The reduction in deposit rates is expected to lower the cost of liabilities for commercial banks, enhancing their willingness to lend [1][2] Group 1: Impact on Real Estate Market - The real estate market showed signs of stabilization, with new residential sales area declining by 2.8% year-on-year from January to April 2025, but the decline rate has narrowed [1][2] - The decrease in LPR is anticipated to lower financing costs for both enterprises and residents, which is crucial for stimulating investment and consumption [1][3] - The current policy environment is expected to support the real estate market, with core cities showing positive performance [2][4] Group 2: Future Policy Directions - The central bank's recent actions, including a reduction in public housing loan rates, are expected to create more room for lowering commercial mortgage rates [3] - The government has shown strong confidence and determination to stabilize the real estate market, with a variety of supportive policies anticipated to be implemented [4][5] - Comprehensive policies aimed at boosting domestic demand and consumption are expected to strengthen the fundamentals of the real estate market [5]

Core Viewpoint - The "May Day" holiday is a crucial marketing period for real estate companies, with various promotional activities and government policies aimed at stabilizing the housing market in Henan province [1][5][7] Group 1: Market Dynamics - Multiple cities in Henan have introduced new policies to support the housing market, including increased housing provident fund support and housing trade-in programs [1] - The sales volume of new and second-hand homes in Henan province saw a quarter-on-quarter increase of 5.2% in Q1, with second-hand homes experiencing a year-on-year growth of 12.62% [7] - The "May Day" holiday is expected to significantly boost consumer purchasing intentions due to the extended time available for home selection and various promotional activities [5][7] Group 2: Promotional Activities - Real estate companies are launching diverse promotional campaigns during the "May Day" holiday, including discounts, giveaways of home appliances, and special pricing for select properties [3][5] - Events such as interactive shows with animals and creative workshops are being organized to enhance customer engagement and attract potential buyers [3] - Developers are offering one-stop services for home selection, purchasing, and mortgage loans to meet consumer housing needs [5] Group 3: Industry Insights - The "May Day" holiday is considered a key marketing opportunity for real estate developers, influencing their annual performance and marketing strategies for the second half of the year [5] - The combination of favorable government policies and active market adjustments has contributed to a stabilization in the real estate market, fostering a positive economic outlook [7]