Investment Rating - The report indicates a positive outlook for the property investment market, with an expected year-on-year growth of 5-10% in total investment volume for the year [8]. Core Insights - In the first half of 2025, the national large-scale property investment transaction volume reached 132.1 billion, a 19% increase compared to the same period last year, despite a 29% decrease in the number of transactions [5][3]. - Institutional buyers are optimistic about consumer and residential assets, with retail property and rental residential transaction volumes doubling year-on-year [3][5]. - Capitalization rates for various asset types in first-tier cities have shown a narrowing increase compared to the second half of last year, although there remains short-term upward pressure [3][5]. Summary by Sections Market Overview - The investment sentiment remains cautious, with institutional capital focusing on high-quality real estate [5]. - The transaction volume for retail properties and rental residential assets increased by 166% and 200% respectively compared to the previous year [5]. Capitalization Rates - The capitalization rates for Grade A office buildings, retail properties, and high-standard warehouses in first-tier cities have expanded by nearly 20 basis points compared to the end of last year [5][9]. - The average capital value of office buildings in first-tier cities has decreased by 43% since 2022, indicating a continued interest in core office assets [8]. Future Predictions - The report anticipates that the market activity will marginally improve in the second half of the year, driven by an expanding pool of available assets and increased risk premiums [8]. - The focus for investment in the second half of the year will remain on consumer and residential sectors, with particular attention to the evolution of trade tariffs and domestic demand stimulation policies [8].

Core Insights - The real estate market in China is experiencing mixed trends, with new residential prices showing slight increases in core cities while second-hand housing prices are declining [1][3][5]. New Residential Market - In July, the average price of new residential properties in 100 cities was 16,877 yuan per square meter, reflecting a month-on-month increase of 0.18% and a year-on-year increase of 2.64% [1]. - First-tier cities saw a month-on-month price increase of 0.36%, while second-tier cities experienced a 0.23% increase, driven by quality improvement projects [3]. - Third and fourth-tier cities, however, faced a month-on-month price decline of 0.19% [3]. Second-Hand Residential Market - The average price of second-hand residential properties in July was 13,585 yuan per square meter, showing a month-on-month decrease of 0.77% and a year-on-year decrease of 7.32% [1]. - First-tier cities experienced a month-on-month price drop of 0.61%, while second-tier and third/fourth-tier cities saw declines of 0.84% and 0.77%, respectively [3][11]. Rental Market - The average rental price in 50 key cities was 34.93 yuan per square meter per month, with a month-on-month decrease of 0.07% and a year-on-year decrease of 3.81% [1]. - Rental demand during the graduation season provided some support, but overall rental prices are still under pressure [1][13]. Policy and Market Outlook - The central government is focusing on implementing policies to stabilize the real estate market, including urban renewal and housing rental regulations [4][5]. - The recent Central Urban Work Conference emphasized the transition from rapid urbanization to stable development, aiming to improve existing urban areas rather than expanding [4]. - Local governments are also taking measures to optimize housing policies, such as canceling housing sales restrictions and enhancing public housing fund access [4][5]. Market Trends - The market is expected to maintain some resilience in core cities due to strong fundamentals, although disparities between different cities and regions are likely to persist [8].

Group 1 - In June, the average price of new residential properties in 100 cities in China was 16,847 yuan per square meter, with a month-on-month increase of 0.19% and a year-on-year increase of 2.59% [1] - The average price of second-hand residential properties in the same cities was 13,691 yuan per square meter, showing a month-on-month decrease of 0.75% and a year-on-year decrease of 7.26% [1] - The rental market saw a slight recovery in June, with the average rent in 50 cities down by 3.71% year-on-year, influenced by increased demand during the graduation season [1] Group 2 - In the first half of the year, core cities like Beijing, Shanghai, and Shenzhen experienced active real estate transactions, with Beijing's new home registrations up by 25% year-on-year and second-hand home registrations up by 17.7% [2] - Shenzhen saw a significant increase in both new and second-hand home registrations, with a total increase of 38.8% year-on-year, including a 41.8% rise in new homes [2] - The real estate market in China is expected to continue its structural differentiation, with "good cities + good properties" presenting opportunities, while a comprehensive market stabilization will require further policy support [2]

Investment Rating - The industry investment rating is "Outperform" [2] Core Insights - The core insight indicates that high-quality housing in prime locations shows strong resilience, with the average new residential price in 100 cities rising by 0.30% month-on-month and 2.56% year-on-year to 16,815 CNY per square meter [4] - The average price for second-hand residential properties in May was 13,794 CNY per square meter, reflecting a month-on-month decline of 0.71% and a year-on-year decrease of 7.24% [4] - The average rental price for residential properties in 50 key cities fell to 35.0 CNY per square meter per month, down 0.34% month-on-month and 3.44% year-on-year [4] Industry Fundamentals Tracking New Housing Transactions and Inventory - In the last week, the new housing transaction area in 30 major cities was 141.72 million square meters, with a cumulative year-to-date transaction area of 3,902.12 million square meters, showing a year-on-year increase of 0.1% [5] - The average transaction area in the last four weeks for first-tier cities was 55.25 million square meters, up 12.5% year-on-year, while second-tier cities saw a decline of 20.5% year-on-year [5][14] - The inventory of sellable residential properties in 14 cities was 79,330.7 million square meters, down 13.91% year-on-year [18] Second-Hand Housing Transactions and Listings - In the last week, the transaction area for second-hand housing in 20 cities was 194.29 million square meters, with a cumulative year-to-date transaction area of 5,096.17 million square meters, reflecting a year-on-year increase of 26.3% [6][23] - The listing index for second-hand housing was 15.63, down 2.1% month-on-month [25] Land Market Transactions - In the last week, 100 major cities saw 68 new residential land supply and 27 transactions, with an average transaction price of 7,035.25 CNY per square meter and a premium rate of 5.23% [28] Market Review - The A-share real estate index rose by 0.86%, while the CSI 300 index increased by 0.88%, indicating a slight underperformance of the real estate index [31] - The Hang Seng property services and management index increased by 0.03%, underperforming the Hang Seng composite index, which rose by 2.2% [31]

Summary of Key Points Core Viewpoint The real estate market in China shows mixed signals in May, with new home prices experiencing slight increases in first-tier cities while second-hand home prices continue to decline. The rental market also reflects a downward trend, indicating a challenging environment for property sales and rentals. Group 1: New Home Prices - The average price of new homes in 100 cities reached 16,815 yuan per square meter in May, with a month-on-month increase of 0.30% and a year-on-year increase of 2.56% [1] - First-tier cities saw a month-on-month increase of 0.90% in new home prices, with Shanghai leading at 1.47% due to the launch of quality improvement projects [5] - Second-tier cities experienced a slight increase of 0.06%, while third and fourth-tier cities saw a decrease of 0.11% [5] Group 2: Second-Hand Home Prices - The average price of second-hand homes in 100 cities was 13,794 yuan per square meter in May, with a month-on-month decline of 0.71% and a year-on-year decrease of 7.24% [1] - First-tier cities experienced a month-on-month decrease of 0.37%, while second-tier and third/fourth-tier cities saw declines of 0.78% and 0.76%, respectively [5] Group 3: Rental Market - The average rental price in 50 cities was 35.0 yuan per square meter per month in May, reflecting a month-on-month decrease of 0.34% and a year-on-year decrease of 3.44% [2] - The rental market continues to show a seasonal downturn, particularly in key cities [2] Group 4: Policy Environment - Recent financial policies, including a reduction in the reserve requirement ratio and interest rates, aim to stabilize the real estate market and support housing demand [9] - Local governments are implementing measures to enhance property sales management and optimize housing loan policies [10] - The overall macroeconomic policy is increasingly supportive of the real estate sector, with expectations for continued easing in June [10]