Core Viewpoint - The real estate market is experiencing a significant reversal, with older homes, previously overlooked due to outdated facilities and layouts, now becoming highly sought after by buyers, driven by government policies aimed at optimizing existing housing stock and enhancing value [1][7]. Group 1: Market Dynamics - The resurgence of older homes is attributed to their irreplaceable location advantages in city centers, which offer established amenities that new developments in peripheral areas cannot match [3][8]. - Data indicates that the average appreciation of older homes over 25 years in first-tier and strong second-tier cities has reached 15%, significantly outpacing the price growth of newly built homes [3][6]. - Renovation efforts in older neighborhoods are enhancing property values, with government subsidies covering 80%-90% of costs for essential upgrades, leading to substantial price increases post-renovation [6][7]. Group 2: Policy Support - The 2026 policy direction emphasizes "controlling increments, reducing inventory, and optimizing supply," positioning older homes as key targets for value enhancement [7][9]. - The central economic work conference encourages the acquisition of existing homes for affordable housing, facilitating a connection between stock housing and social housing, thus broadening the value realization pathways for older homes [7][9]. - Continued reforms in the housing fund system, including increased loan limits and expanded usage for renovations, are expected to lower financial barriers for first-time buyers of older homes [7][9]. Group 3: Investment Considerations - The demand for older homes is not uniform; it reflects a rational choice within a differentiated market, with core city assets stabilizing while lower-tier cities face ongoing challenges [8][9]. - Key factors for buyers to consider include location value, eligibility for renovation programs, and the quality of the property, which will influence both appreciation potential and living experience [8][9]. - Recommended focus areas for investment include older homes in core areas that are part of renovation plans, identified as priority renovation projects, and rural idle properties near scenic or industrial zones, while avoiding non-core older homes in lower-tier cities [8][9].