Investment Rating - The industry investment rating is "Positive" (maintained) [4] Core Insights - The new "Hushiqiao" policy issued on February 25, 2026, represents a significant enhancement over the previous 2024 policy, aiming to systematically lower the barriers to home purchasing, enhance purchasing power, and reduce replacement costs to better meet rigid and improvement housing demands [1][2] - The policy is expected to stimulate short-term demand release, boost market confidence, and increase activity, particularly through the relaxation of purchasing qualifications in the outer ring, which may lead to a resurgence in both second-hand and new home transactions during the "small spring" period [1][2] - Structural impacts are anticipated, with core areas and improvement products benefiting the most, as the relaxation of purchase restrictions is likely to support price stability and liquidity in central urban areas and mature suburban districts [2] - The policy will facilitate market circulation and repair the "sell one buy one" replacement chain, targeting improvement customers through relaxed public housing loan recognition and property tax exemptions, thus promoting a healthy linkage between the first and second-hand housing markets [2] Summary by Sections Policy Comparison - The 2026 policy significantly reduces the social security duration required for non-local buyers in the outer ring from "5 years" to "1 year" and allows eligible non-local buyers to purchase an additional property [5] - The new policy introduces a housing purchase channel for holders of residence permits who have held them for over 5 years, allowing them to buy one property citywide without needing social security or tax proof [5] Credit and Public Fund Policies - The new policy raises the maximum public fund loan limit for first-time buyers from 1.6 million to 2.4 million, with potential increases up to 3.24 million for families with multiple children [6] - It optimizes the recognition of loan counts, allowing families with settled public fund loans and owning one or fewer properties to apply for public fund loans again [6] Investment Recommendations - The report suggests focusing on three main investment lines: 1. **Elasticity Priority** - Local state-owned enterprises and real estate companies that will directly benefit from the recovery of regional market activity, with high business concentration and maximum performance and valuation elasticity [3] 2. **Stable Leaders** - Resource-based real estate companies with a strong brand presence and quality land reserves in Shanghai, expected to benefit from overall market recovery and accelerated new home sales [3] 3. **Valuation Recovery** - National real estate companies with strong operations, as the policy is expected to improve overall industry expectations and drive valuation recovery for quality firms [3]

Core Viewpoint - The real estate market in 2026 is showing positive signs with significant increases in transaction volumes in first-tier cities, driven by strong policy support and a gradual release of demand, indicating a transition from bottoming out to stabilization in the market [1][4]. Policy Support - The core driver of the 2026 real estate market recovery is systematic policy support, characterized by precise and substantial measures rather than tentative adjustments [4]. - The Central Economic Work Conference emphasized stabilizing the real estate market, proposing strategies such as "city-specific policies to control increments, reduce inventory, and optimize supply" [4]. - Local governments are rapidly implementing supportive policies, including optimizing housing fund policies and providing subsidies to stimulate market activity [4]. Market Performance - The market has shown clear signs of recovery, with new home transaction volumes in first-tier cities surging by 74% in the first week of 2026, and Shenzhen experiencing a remarkable 263% increase [7]. - High-end properties in core cities are performing exceptionally well, with significant sales recorded in premium developments [7]. - Key indicators of the real estate market have returned to reasonable levels, with new construction and sales metrics reflecting historical lows, suggesting a solid foundation for market recovery [8]. Financial Environment - The financial environment remains supportive, with the five-year Loan Prime Rate (LPR) at historical lows and first-time home loan rates dropping below 3%, significantly reducing borrowing costs [8]. - The financing costs for leading real estate companies are stable, which helps mitigate delivery risks and boosts buyer confidence [8]. Structural Characteristics - The recovery in the real estate market will exhibit significant structural characteristics, moving away from a "universal rise" era [9]. - Core cities in metropolitan areas are expected to stabilize and even see structural price increases, while lower-tier cities may continue to face prolonged adjustment periods [9]. - The market is shifting towards higher-quality housing, with improved demand for better properties and a decline in the competitiveness of older stock [9]. Outlook for 2026 - The first quarter of 2026 is anticipated to see a "small spring" in the market, with increased activity expected due to delayed traditional sales seasons and concentrated marketing efforts from developers [10]. - The overall market recovery will depend on improvements in employment and income expectations, as well as the availability of quality supply [10]. - The arrival of the "small spring" is viewed as a critical turning point for the industry, signaling a transition towards high-quality development in the real estate market [10].

Core Insights - The real estate market in 2026 is expected to exhibit four major trends, indicating a shift from the previous notion that "any property will appreciate" to a more selective approach in property investment [1][8]. Trend Analysis - **Urban Disparity**: There will be an increasing gap in property values between high-demand cities and those with declining populations. Core cities like Beijing, Shanghai, and Chengdu are expected to see stable or slightly rising prices, while third and fourth-tier cities may continue to experience price declines. For instance, new home prices in Shanghai's core areas rose by 5.6% year-on-year in 2025, while properties in less populated areas may take years to sell due to oversupply [1][3]. - **Shift to Improved Housing**: The demand for larger, more comfortable homes is rising, with properties sized between 120-144 square meters becoming increasingly popular. In the first five months of 2025, these larger units accounted for 30% of transactions in 30 major cities. Additionally, buyers are prioritizing properties that can be delivered on time, leading to a rise in the sales of completed homes, which reached 35.6% in 2025, up by 4.8 percentage points [3][5]. - **Increase in Affordable Housing**: By 2026, a dual system of affordable and market-rate housing is expected to be more established, with 60% of families potentially able to access affordable housing options. This will alleviate financial pressure on first-time buyers, as affordable housing can be priced at 20% lower than market-rate homes in the same area [5][7]. - **Supportive Policies**: The government is likely to continue implementing supportive policies to stimulate reasonable housing demand, including potential interest rate cuts and increased availability of housing subsidies. This could lead to lower monthly mortgage payments for buyers, making homeownership more accessible [5][7]. Recommendations for Buyers - Focus on acquiring core assets in major cities rather than spreading investments across multiple lower-tier properties, as evidenced by a 20% increase in second-hand home transactions in major cities in early 2025 [7]. - Pay attention to the benefits of old community renovations, as the government has allocated 33.2 billion yuan for such projects, which could enhance property values in renovated areas [7]. - First-time buyers should act promptly if suitable properties arise, especially those eligible for affordable housing, while those looking to upgrade should compare options during favorable policy conditions [7]. - Abandon speculative investment strategies, as the market is shifting towards a "housing for living" approach rather than for profit [7][8].

Core Viewpoint - The real estate market in China is expected to continue its adjustment trend in 2025, with second-hand housing in core cities maintaining stability through "price for volume" strategies, while improvement demand becomes the main support for the new housing market [1] Group 1: Second-hand Housing Market - In 2025, the transaction volume of second-hand residential properties in 30 key cities is estimated to be around 1.74 million units, remaining stable year-on-year [1] - The first quarter of 2025 saw a 25% year-on-year increase in second-hand housing transactions, while the second quarter experienced a slowdown, with a 13% year-on-year growth in September [1] - The proportion of second-hand housing transactions in the total market reached approximately 65% in 2025, an increase of 4 percentage points from 2024 [2] Group 2: New Housing Market - Improvement housing demand is a significant support for the new housing market, with larger units (120-144 square meters) seeing an increase in transaction share across 30 representative cities [3] - The average clearing cycle for available inventory in 50 cities is 22.2 months, indicating a slow-moving market [3] - New housing prices in 100 cities have increased by 2.58% due to the entry of improvement-type properties, while second-hand housing prices have decreased by 8.36% cumulatively [3] Group 3: Policy Impact - A policy optimization announced in December 2025 in Beijing aims to stimulate the market by lowering purchase requirements for non-local families and supporting multi-child families [4] - Following the new policy, the average daily signing volume for new and second-hand homes in Beijing increased by 72.8% and 37.4% respectively compared to the previous period [4] - The Ministry of Finance and the State Administration of Taxation announced a new tax policy effective January 1, 2026, which will impact the sale of homes purchased less than two years ago [5] Group 4: Future Outlook - The report anticipates that policies will continue to be implemented in 2026 to stabilize the real estate market, focusing on demand stimulation and supply optimization [6] - The overall market is still in a "de-stocking" phase, with limited new housing supply in most cities, while core cities maintain a certain level of new supply [6]

Core Insights - The "14th Five-Year Plan" indicates a significant shift in the real estate sector, moving from an economic driver to a focus on housing and livelihood [1][3][12] Group 1: Real Estate Positioning - Real estate is now categorized under "increasing security and improving people's livelihoods," signaling a return to its fundamental role as a place for living rather than an economic stimulus [3][4] - The focus is on creating "safe, comfortable, green, and smart" housing, reflecting a shift in public demand from mere availability to quality and community environment [4][5] Group 2: Quality and Safety Standards - The plan emphasizes the establishment of a "lifecycle safety management system" for housing, addressing past issues of rapid construction leading to quality and safety concerns [5][6] - Initiatives like "housing health checks" and "housing insurance" are being introduced to ensure long-term safety and maintenance of properties [5][6] Group 3: Regulatory Changes - The plan calls for a new real estate development model, focusing on improving regulations around property development, financing, and sales to mitigate risks [5][6] - There will be a push for current housing sales and stricter regulations on pre-sale funds to protect buyers [5][6] Group 4: Housing Supply Dynamics - The plan aims to optimize the supply of affordable housing and increase the supply of improved housing based on local needs [6][7] - This dual approach targets both low-income workers and families seeking better living conditions, indicating a significant market segmentation [7][8] Group 5: Market Segmentation and Future Outlook - The real estate market is expected to experience significant differentiation, with price disparities between affordable housing, regular market housing, and high-end properties [10][11] - The notion that "buying a house guarantees profit" is over, and future purchases will require careful selection based on quality [11][12]

Core Insights - The Chinese real estate market is experiencing a new landscape after deep adjustments, with significant price increases in various cities reflecting regional economic development and population movement [1][8] - The top cities in the price increase rankings are primarily driven by strong industrial foundations and innovative ecosystems, with a focus on improving living environments and urban quality [7][8] Group 1: Price Increases by City - Hangzhou leads with a monthly price increase of 6.3%, supported by a diverse economic base including digital economy, biomedicine, and AI, alongside strong demand for improved housing [1] - Hefei follows with a 5.8% increase, driven by the growth of industries such as new energy vehicles and integrated circuits, attracting young tech talent [2] - Chengdu ranks third with a 5.5% increase, benefiting from the development of the Chengyu economic circle and a surge in demand for high-quality housing [4] - Nanjing and Suzhou have increases of 5.2% and 4.9% respectively, with Nanjing's urban development and Suzhou's advanced manufacturing sector contributing to their growth [4] - Wuhan's price increase of 4.7% is fueled by the demand for housing in high-tech zones, while Changsha and Xi'an see increases of 4.5% and 4.3% respectively, supported by industrial upgrades [4][6] - Qingdao and Zhengzhou round out the top ten with increases of 4.1% and 3.9%, driven by their unique industrial strengths and improved transportation links [6] Group 2: Common Characteristics - The cities on the list share strong industrial bases and effective talent policies, which provide lasting momentum for the real estate market [7] - There is a noticeable structural change in housing demand, with a focus on improved housing and high-end talent apartments, while rigid demand is met through affordable rental housing [7] - Cities are enhancing their market stability by regulating speculative behaviors and ensuring a balanced supply of land, contributing to healthy market development [7]

Core Insights - The Chinese real estate market has entered a critical bottoming phase since the second half of 2021, driven by intensive policy measures aimed at stabilizing the market [1][3]. Market Changes - The cumulative sales of new residential properties during the "14th Five-Year Plan" period are projected to reach approximately 5 billion square meters [1][2]. - The supply-demand relationship in the real estate market has shifted, with a significant portion of demand now being met through second-hand housing, while new housing is increasingly catering to improvement needs [2][6]. Policy Impact - Since the second half of 2021, the sales of new residential properties have been on a continuous decline, with a notable policy shift in September 2024 aimed at stabilizing the market [3][6]. - In the first nine months of 2025, the sales area of new residential properties was 6.58 million square meters, a year-on-year decrease of 5.5%, but the decline rate has narrowed compared to the previous year [6][10]. Market Resilience - The second-hand housing market has shown greater resilience, with transaction volumes in key cities increasing by 10% year-on-year in the first seven months of 2025, reaching a peak share of 68% in July [6][10]. - Despite the increase in transaction volume, second-hand housing prices have been on a downward trend for 41 consecutive months [6][10]. Market Segmentation - A clear "stronger stronger" market segmentation is emerging, with first-tier cities experiencing a rise in new housing prices, while second and third-tier cities face price declines [11][13]. - The investment focus of real estate companies has shifted towards core cities, with significant land auction prices being recorded in cities like Shanghai and Beijing [14][16]. Demand Trends - Improvement demand has become the core support for the new housing market, with larger unit types (120-144 square meters) accounting for 30% of transactions in key cities [17][21]. - High-end market performance has been notable, with significant increases in transactions for properties priced between 10 million to 20 million yuan in cities like Beijing and Chengdu [20][21]. Future Outlook - The upcoming report titled "Prospects for the 15th Five-Year Plan: Exploring the 'Golden Pit' of the Non-Restricted Cycle Real Estate Market" is set to be released on October 30, 2025, providing further insights into the industry [21][22].

Core Insights - The new real estate policy in Shenzhen, implemented on September 5, has positively impacted the housing market, leading to increased transaction volumes in both new and second-hand properties [1][3][5] New Housing Market - In the week of September 15-21, Shenzhen recorded 969 new housing transactions, reflecting a 10% increase compared to the previous week, indicating a steady upward trend since the policy's implementation [3] - The proportion of luxury homes priced above 15 million increased by 2.6 percentage points, while the share of mid-range properties priced between 5-8 million rose by 3 percentage points compared to August, showcasing a strong demand for improved housing options [3][5] Second-Hand Housing Market - The second-hand housing market recorded 1,408 transactions, maintaining a high level for the year, with Longgang District leading in volume [4] - The high transaction volume in the second-hand market is expected to facilitate a "sell old" strategy, allowing homeowners to liquidate their current properties and reinvest in new homes, thus creating a positive cycle between second-hand and new housing markets [5] Market Sentiment and Future Outlook - The new policy has led to an increase in market inquiries and transactions, particularly in areas where purchase restrictions have been relaxed, indicating a responsive market environment [5] - Experts suggest that as weather conditions improve and demand for school district and marriage-related housing increases towards the end of the year, the market is likely to stabilize in terms of both price and volume [5]

Core Insights - The future of the real estate market is characterized by a clear divergence in property values, emphasizing the importance of location and property quality [1][2][17] - Industry leaders Wang Jianlin and Sun Hongbin agree that the era of indiscriminate property investment is over, urging buyers to be more selective [2][17] Group 1: Market Trends - Wang Jianlin notes that the real estate market in China has reached saturation, and the previous trend of guaranteed price increases is no longer valid [2] - Sun Hongbin highlights that while there is an oversupply of low-quality housing in third and fourth-tier cities, high-quality properties remain in demand [2][17] Group 2: City-Level Analysis - In first-tier cities, premium properties in core areas continue to appreciate, with examples showing price increases of 0.36% in Shenzhen's Nanshan District [3][4] - Conversely, older properties in prime locations face significant price declines, with some experiencing a 15% drop in 2023 [4] - Strong second-tier cities like Hangzhou and Chengdu show moderate price increases, particularly in industrial hubs, with projected growth of 3% in key areas [5][6] Group 3: Property Quality Segmentation - Three categories of properties are expected to appreciate: well-located affordable housing, high-quality upgrade housing, and small units in prime locations [6][10][12] - Properties lacking essential amenities, such as old neighborhoods and remote "ghost town" developments, are at risk of significant value depreciation [12][13] Group 4: Investment Guidelines - Buyers are advised to prioritize properties in first-tier cities and well-supported second-tier cities, focusing on quality and location [14][15] - The importance of surrounding infrastructure, such as transportation and educational facilities, is emphasized as a key factor in property value stability [14][15]

Group 1 - The Shanghai Finance Bureau announced a policy adjustment on September 19, allowing non-local homebuyers to be exempt from property tax for newly purchased second homes if the average per capita housing area does not exceed 60 square meters [1] - This marks the first substantial optimization of the property tax pilot program since its inception in 2011, aimed at reducing disparities between local and non-local residents and encouraging talent to live and work in Shanghai [1] - The policy is expected to positively impact non-local families looking to purchase multiple homes, potentially boosting housing demand and transaction recovery [1] Group 2 - Recent policy optimizations in first-tier cities like Beijing, Shanghai, and Shenzhen, combined with seasonal demand, are anticipated to restore the real estate market's fundamentals [2] - Current real estate sector valuations are considered low, suggesting a favorable environment for investors to accumulate real estate stocks [2] - Developers focusing on core first and second-tier cities with a strong emphasis on improvement products and sustained land acquisition capabilities are recommended as potential beneficiaries of upcoming policy benefits [2]