Core Viewpoint - Despite a conservative outlook for the real estate market in 2025, Shanghai has shown resilience, achieving a "tail-end" market performance with second-hand housing transactions reaching a new high of 22,000 units in two consecutive months, while new homes saw 4,088 units launched in December with 2,352 subscriptions [1] Group 1: Market Trends - The rapid cooling of the points system for new homes in Shanghai has exceeded expectations, with only 8% of new projects triggering the points system in 2023, down from 36% in 2022 and 22% in 2023 [2][3] - The supply-demand dynamics have shifted significantly, with an oversupply of new homes leading to a price war and a more cautious buyer sentiment [3][4] - The disappearance of the price gap between new and second-hand homes has diminished the incentive for buyers to rush into the market [3][4] Group 2: Price Dynamics - High-scoring red plate properties have seen significant price increases, with some core area properties experiencing over 50% price appreciation since their launch [5][6] - Conversely, properties in outer districts have faced price declines of around 5%, with some experiencing drops of over 25% due to market cooling [7][8] - The auction market has revealed the true value of properties, with some auctioned homes selling at prices significantly lower than surrounding new developments, indicating a return to realistic pricing [9][10] Group 3: Future Outlook - A total of 33,561 units of previously restricted new homes are expected to be released in 2024, which could significantly impact the second-hand market, particularly in specific areas [11] - The market is likely to see increased competition between new homes and second-hand properties, with new developments offering better layouts and amenities [11][12] - The focus for buyers will shift from high points to the actual quality of the property, emphasizing the importance of practical living needs over speculative investment [13]

Core Insights - Shanghai has initiated significant policy easing in the real estate market, following Beijing's lead, starting from August 25, allowing for the relaxation of purchase restrictions outside the outer ring and enhancing housing fund benefits for new home purchases [1][21]. Group 1: Policy Changes and Market Impact - The new policy primarily benefits new homes, while the secondary market outside the outer ring is expected to face challenges [5][21]. - The total number of second-hand listings outside the outer ring in Shanghai is approximately 65,000, with older relocation houses and dilapidated properties making up a significant portion [6][9]. - The introduction of the new policy has led to a lack of transparency in the second-hand market, as major platforms like Lianjia have hidden historical transaction prices, complicating the market dynamics [3][5]. Group 2: Market Dynamics and Competition - The second-hand market is characterized by older properties, which are struggling to sell, with some listings seeing price increases that exceed 20% compared to previous transaction prices [11][12]. - The competition between second-hand homes and new homes is intensifying, particularly in areas like Qingpu, where new homes are being offered at competitive prices [12][16]. - The new policy has not significantly increased the sales volume of unsold new developments, as many potential buyers have already made their decisions prior to the policy change [24][30]. Group 3: Buyer Behavior and Market Sentiment - The new policy is expected to attract single buyers, particularly non-local and local singles, who can now purchase properties in the inner ring, potentially increasing competition in the outer ring's second-hand market [33][36]. - Despite the policy's introduction, the actual increase in buyer interest has been moderate, with many buyers still hesitant due to existing market conditions [27][30]. - The market sentiment remains cautious, as the high inventory levels of new homes continue to pose challenges for sales, even with the new policy in place [28][30].