Investment Rating - The report suggests a positive outlook for the real estate industry, emphasizing the importance of inventory reduction and the acquisition of existing properties for affordable housing [6][8]. Core Insights - The report highlights the government's increasing support for the acquisition of existing properties, particularly for affordable housing, as a key strategy to stabilize the real estate market [4][6]. - It notes that various cities are actively promoting the acquisition of existing properties, with over 36 key cities issuing clear acquisition announcements and more than 80 cities supporting local state-owned enterprises in purchasing existing housing [15][20]. - The report also discusses the issuance of special bonds to facilitate the acquisition of idle land, with over 5,500 projects planned, covering nearly 300 million square meters and exceeding 750 billion yuan in total value [5][6]. Summary by Sections 1. Progress on Acquiring Existing Properties - Since 2024, the central government has repeatedly emphasized policies supporting the acquisition of existing properties, with the 2026 government work report specifically mentioning the encouragement of such acquisitions for affordable housing [10][12]. - By mid-February 2026, 36 key cities had issued clear acquisition announcements, and over 80 cities had expressed support for local state-owned enterprises to acquire existing housing [15][20]. 2. Case Study: Shanghai - Shanghai has initiated a market-driven approach to acquire existing properties for affordable rental housing, with pilot projects launched in districts such as Pudong, Jing'an, and Xuhui [33][44]. - The report details the specific requirements and types of properties being targeted for acquisition in these districts, highlighting the focus on small-sized, affordable units [33][34]. 3. Progress on Acquiring Idle Land - The report indicates that since 2024, various policies have been implemented to support the acquisition of idle land, with 26 out of 31 provinces announcing plans to use special bonds for this purpose [5][6]. - As of March 26, 2026, the total amount of special bonds issued for acquiring idle land reached approximately 541.56 billion yuan, with Guangdong and Zhejiang provinces leading in issuance [5][6]. 4. Investment Recommendations - The report recommends focusing on local state-owned enterprises and developers involved in the acquisition of existing properties and idle land, as these efforts are expected to stabilize the real estate market and improve living conditions [6][20].