Core Viewpoint - The policy shift towards promoting "existing home sales" aims to fundamentally mitigate delivery risks in the real estate market, transitioning from a pre-sale model to a system where buyers can see and purchase homes that are already completed [1][2]. Group 1: Policy Changes - The national housing and urban-rural development meeting emphasized the implementation of existing home sales, marking a significant upgrade in policy positioning compared to the previous year's meeting [1]. - The shift from a pre-sale model, which has been in place for over 30 years, to existing home sales reflects a response to the collective anxiety regarding delivery uncertainties among buyers [2]. Group 2: Impact on Developers - Existing home sales require developers to invest all construction funds upfront, extending the cash flow cycle from months to two to three years, thereby raising the industry entry threshold [2]. - This policy change has led to a noticeable shift in developers' operational logic, with a greater focus on cash flow management and product quality, moving away from financing and marketing as the primary competitive factors [2]. Group 3: Market Dynamics - The transition to existing home sales is expected to result in "short-term pain, long-term benefits," with a potential short-term decline in new home supply but a more balanced supply-demand dynamic in the long run [2]. - The introduction of existing home sales is anticipated to reduce speculative behavior in the market, as buyers can make more informed decisions by viewing properties firsthand [3]. Group 4: Financial Innovations - Recommendations have been made for the development of financial tools such as "existing home development loans" to alleviate long-term funding pressures on real estate companies [3]. - Adjustments to land transfer methods and payment conditions are suggested to ease financial burdens on developers, such as extending payment deadlines for land transfer fees [3].

Core Viewpoint - The real estate market in China is undergoing a significant transformation, moving away from the traditional "pre-sale" model towards a "current sale" approach, reflecting a shift in consumer sentiment and regulatory changes [1][3][7]. Summary by Sections Background of Pre-sale System - The pre-sale system, known as "buying off-plan," was introduced in China in 1994 and has been a crucial financing channel for developers, historically accounting for over 20% of their funding sources [4][5]. - This model allowed developers to alleviate financial pressure and provided consumers with lower prices for future properties [4]. Emergence of Current Sale Model - The shift towards current sales began with Hainan Province in 2020, which abolished the pre-sale system, leading to over 30 provinces and cities adopting similar policies [7][8]. - Recent data shows that the proportion of current sales has increased significantly, from 12.7% in 2020 to 30.84% in 2024, with recent figures reaching 36% [10][20]. Policy Changes and Implementation - The recent policy from Xinyang City mandates that new residential projects must be sold as completed properties, reflecting a broader national trend [3][10]. - The central government has recognized the need to reform the pre-sale system, making it a priority for future housing policies [8]. Challenges for Developers - The transition to current sales poses significant challenges for developers, including increased capital requirements and longer project timelines, which could lead to financial strain [14][16]. - Developers now face a longer sales cycle, extending from 6-18 months to 18-36 months, increasing their financial risk [14]. Consumer Sentiment and Market Dynamics - The shift in sales models is driven by changing consumer attitudes, particularly in light of recent financial difficulties faced by developers, leading to a preference for purchasing completed homes [12][20]. - The current sales model is expected to reshape consumer behavior, moving from speculation to a focus on tangible property quality [12][20]. Gradual Reform Approach - Experts advocate for a gradual reform approach to avoid market disruption, suggesting that both pre-sale and current sale models may coexist in the near future [16][18]. - The implementation of supportive policies, such as deposit systems and tax incentives for current sales, is crucial for facilitating this transition [20].