Core Viewpoint - The luxury real estate market in China is experiencing significant price declines, challenging the long-held belief that luxury properties are immune to market fluctuations [3][22][23] Group 1: Market Trends - Recent transactions indicate that luxury properties are being sold at steep discounts, with examples showing reductions of up to 75% from previous listing prices [2][6] - In 2024, only 1,497 units of second-hand luxury homes priced over 30 million yuan were sold in 30 major cities, a stark contrast to the 65% increase in new luxury home sales [6][10] - The trend of declining prices is not limited to first-tier cities but is also spreading to second and third-tier cities, with some properties experiencing drops of over 70% [8][9] Group 2: Factors Influencing Price Declines - An oversupply of new luxury homes is drawing potential buyers away from the second-hand market, leading to decreased demand for older properties [10][12] - Economic downturns have made wealthy individuals more cautious with their spending, impacting the luxury real estate market [13][14] - The previous speculative nature of luxury home prices has diminished, with current buyers being more discerning and focused on actual value rather than inflated prices [14][15] Group 3: Changing Perceptions of Luxury Real Estate - Luxury properties, once seen as a stable asset, are now viewed as potential liabilities, with reports indicating that they may no longer serve as effective wealth preservation tools [17][22] - The belief that real estate will always appreciate in value has been challenged, as many now recognize that properties can depreciate and become financial burdens [20][23] - The market is expected to further differentiate between genuinely scarce luxury properties and those that are merely overbuilt, with the latter likely to struggle in terms of value retention [22][24]

Core Insights - The Shenzhen real estate market experienced a decline in both new and second-hand residential transactions in October, marking a cooling trend during the traditional peak season [1][3][6] - The decrease in transactions is attributed to several factors, including the impact of the National Day holiday, reduced availability of attractive properties, and a high base effect from last year's supportive policies [1][3][6] New Housing Market - In October, new housing transactions in Shenzhen totaled 3,352 units, a significant month-on-month decline of 29%, with residential sales at 2,651 units, down 14.1% [3][6] - Despite the drop in sales, new housing supply remained active, with 4,143 new units approved for sale, reflecting a 2.3% increase month-on-month, and residential supply surged by 37.9% [3][6] Second-Hand Housing Market - The second-hand housing market also saw a decline, with 5,276 transactions recorded, a 6.8% decrease, and residential sales at 4,196 units, down 7.7% [5][6] - The decline was influenced by the holiday season and a reduction in buyer enthusiasm following a previously active September [5][6] Market Dynamics and Future Outlook - Despite the October downturn, the market showed signs of resilience, with second-hand housing transactions remaining above 5,500 units for eight consecutive months, indicating sustained demand [6][8] - The average transaction price for second-hand residential properties rose to 58,900 yuan per square meter, a 0.3% increase month-on-month, although the listing price slightly decreased by 1% [6][8] - The announcement of Shenzhen hosting the 2026 APEC meeting has sparked renewed interest in the real estate market, leading to a strong start in November with significant increases in both new and second-hand property transactions [7][8] Policy Environment - Recent policy signals from central and local governments indicate a focus on high-quality real estate development and risk management, with over 510 new policies introduced this year [8] - The market is expected to face pressure in the short term due to high base effects and increased supply, but a gradual recovery in transaction volumes is anticipated as year-end approaches [8]

Core Insights - The Shenzhen real estate market experienced a decline in both new and second-hand residential transactions in October, marking a cooling trend during the traditional peak season [1][3] - The decrease in transactions is attributed to several factors, including the impact of the National Day holiday, a reduction in attractive property options, and a high base effect from the previous year's market activity [1][3] - Despite the downturn in October, there are signs of recovery in November, driven by positive news such as the selection of Shenzhen as the host city for the 2026 APEC meeting, which has stimulated buyer interest [4][5] New Housing Market - In October, Shenzhen's new housing transactions totaled 3,352 units, reflecting a 29% month-on-month decline, with residential sales at 2,651 units, down 14.1% [1][2] - The supply of new homes was active, with 4,143 new units approved for sale, a 2.3% increase from the previous month, and residential supply surged by 37.9%, reaching the highest level in three months [2] - High-end market segments saw notable activity, with several luxury projects experiencing strong sales and new developments set to enter the market by year-end [2] Second-Hand Housing Market - The second-hand housing market also showed a month-on-month decline, with 5,276 transactions recorded, down 6.8%, and residential sales at 4,196 units, down 7.7% [3] - The decline was influenced by the holiday season and a decrease in buyer urgency following a busy September, leading to a need for more time to compare properties [3] - Despite the overall decline, the second-hand market maintained a robust performance, with transaction volumes exceeding 5,500 units for eight consecutive months, and prices showing a slight increase [3] Market Outlook - November began with a strong performance in the Shenzhen real estate market, attributed to the APEC announcement, which has led to increased buyer activity in both new and second-hand markets [4][5] - Recent policy signals from central and local governments indicate a focus on high-quality real estate development and risk management, with over 510 policy measures introduced this year [6] - The market is expected to face pressure due to high base effects from the previous year, but new supply and ongoing demand may support sales in the coming months [6]

Summary of Real Estate Market Conference Call Industry Overview - The conference call discusses the performance of the real estate market in October 2025, particularly focusing on the top 100 real estate companies in China. The overall sales amount for these companies was 253 billion yuan, reflecting a year-on-year decline of 42% [1][2][7]. Key Points Sales Performance - The sales performance of the top 100 real estate companies in October 2025 was significantly impacted by ongoing market pressures, with a cumulative decline of 16% over the first ten months of the year, which is an increase of 4.2 percentage points compared to the previous nine months [2][7]. - Major state-owned enterprises like China Resources and China Overseas experienced year-on-year declines exceeding 50% due to high base effects from the previous year [7]. Market Dynamics - The luxury housing market showed signs of differentiation, with high-end areas in cities like Shanghai, Beijing, and Shenzhen maintaining some demand, but overall sales were weak, particularly in secondary locations [4][5]. - The second-hand housing market continued to see rapid price declines, with no signs of stabilization. New building regulations in Shanghai have pressured prices of older properties, leading to expectations of continued price drops in the short term [6][12]. Supply and Demand - The new supply of properties in 30 cities dropped significantly, with a month-on-month decrease of 51% and a year-on-year decrease of 21%, marking the lowest monthly supply since 2020 [8][9]. - The land auction market has cooled, with a notable decline in both the area and monetary value of land sold across 300 cities, reflecting cautious behavior from developers [19]. City-Specific Insights - In first-tier cities, new home transactions have cooled, with significant month-on-month declines in cities like Shanghai (down 15%) and Shenzhen (down over 20%) [11][12]. - The performance of second and third-tier cities showed some resilience, with an average month-on-month increase of 1%, although year-on-year figures still reflected a decline of 36% [13]. Future Outlook - The market is expected to see increased supply and promotional efforts from developers in November and December to boost sales performance, although year-on-year declines may widen to around 50% due to high base effects from the previous year [4][21]. - The anticipated market stabilization point may be pushed further into the future, with predictions suggesting a potential turning point in 2026 or 2027, indicating a longer-term adjustment cycle rather than a short-term fluctuation [20]. Additional Insights - The impact of recent policy changes, such as the lifting of certain purchase restrictions in major cities, has dissipated without leading to sustained market recovery [3][4]. - The average premium rate in land auctions has dropped below 3%, indicating a more cautious approach from developers regarding land acquisition [19][17]. This summary encapsulates the critical insights from the conference call regarding the current state and future expectations of the real estate market in China.

Core Viewpoint - The absolute volume of new home transactions is expected to remain at a low level, with the possibility of further expansion in the year-on-year decline due to a high base from October last year. The differentiation between cities and projects will continue to intensify [1][29]. Market Performance - In September, the new home market saw steady supply and demand during the "Golden September" marketing season, with a slight month-on-month decrease in project sales rates, but a year-on-year increase, maintaining high volatility [3][5]. - The average sales rate for new homes in 30 key cities in September was 39%, a slight decrease of 3 percentage points month-on-month but an increase of 10 percentage points year-on-year [5][4]. City-Specific Trends - Cities such as Beijing, Chengdu, Xiamen, Changsha, and Hangzhou had sales rates exceeding 60%, while cities like Nanjing, Kunming, and Jinan had rates below 20%, indicating a continued low market performance [7][8]. - The sales rates for new projects in Wuhan showed a strong performance, with new regulation projects achieving a first-day sales rate of 40%, while traditional projects lagged significantly [9][13]. High-End Market Dynamics - The introduction of high-end luxury properties in cities like Shanghai and Hangzhou has led to increased market activity, with some projects experiencing a "buy more as prices rise" phenomenon [14][15]. - Notable luxury projects in Shanghai, such as Jinling Huating, achieved record sales, with the second phase selling out quickly and generating over 98 billion yuan in sales [19]. Price Adjustment Strategies - In weaker second-tier cities like Xi'an, Suzhou, and Zhengzhou, some projects have adopted price reduction strategies to boost sales, with significant discounts leading to improved sales performance [24][25][26]. - Projects in Fuzhou have also seen notable sales increases due to price adjustments, demonstrating the effectiveness of "price for volume" strategies [26]. Future Outlook - Looking ahead to October, the absolute volume of new home transactions is likely to continue at low levels, with potential for further year-on-year declines. Differentiation among cities and projects is expected to persist, with core cities maintaining high market activity while others may struggle [29].

Group 1: Office Market Outlook - The vacancy rate for Grade A office buildings in Hong Kong is expected to rise to approximately 19% by the end of 2025, as new project completions outpace new leasing demand despite ongoing market absorption improvements [1] - Overall Grade A office rents in Hong Kong are projected to decline by about 7% for the year [1] - Owners are adopting more flexible leasing strategies to enhance competitiveness in response to the supply-demand imbalance [1] Group 2: Retail Market Insights - Core area street shops are expected to experience steady growth, primarily benefiting from stable leasing demand from diverse tenants, including the food and beverage sector [1] - The government's active promotion of specialty tourism is anticipated to attract high-spending travelers, further driving retail market recovery and growth [1] Group 3: Industrial Market Trends - Industrial rents are forecasted to decrease by approximately 10% by the end of 2025 due to weak demand and increasing vacancy pressures [1] - The market is undergoing structural changes, and policy-driven revitalization measures will take time to have a substantial impact on supply [1] Group 4: Investment Climate - The optimization measures of the Capital Investment Entrant Scheme (CIES) announced in the Policy Address are expected to boost investor confidence and attract capital inflows into the Hong Kong real estate market [2] - High-end residential properties, subdivided offices, and street shops are anticipated to benefit from these developments, with student accommodations and redevelopment projects also becoming market focal points [2] - Transaction volumes in the real estate market are expected to remain stable [2]

Summary of the Real Estate Market Conference Call Industry Overview - The conference call focuses on the real estate industry in China, specifically analyzing the performance of the top 100 real estate companies in September 2025 and the overall market trends. Key Points and Arguments Sales Performance - In the first three quarters of 2025, the cumulative sales amount nationwide decreased by 11.8% year-on-year, but the decline narrowed by 1.3 percentage points compared to January-August, indicating a slowing market decline [2][3] - In September, the sales amount of the top three real estate companies increased by 2.6% year-on-year, while the overall sales of the top 100 companies grew by 0.4%, a significant recovery compared to August [2][4] - The sales amount for the top 100 companies in September reached 252.78 billion yuan, a month-on-month increase of 22.1% [3] Market Supply and Demand - New housing supply in 30 key cities increased significantly by 55% month-on-month to 10.2 million square meters in September, although it still represented a 15% year-on-year decline [2][7] - The new housing transaction area in September for 30 key cities rose by 18% month-on-month but fell by 5% year-on-year, indicating a recovery in first-tier cities while the overall market remains below last year's levels [2][10] Market Dynamics - The new housing market's absorption rate decreased by 4 percentage points to 38%, suggesting ongoing pressure despite signs of recovery [2][13] - The second-hand housing market saw a month-on-month decline of 1% but a year-on-year increase of 10%, with first-tier cities showing policy effects [2][15] Performance by Company Tier - The top three companies (e.g., Poly, Greentown, China Overseas) showed a month-on-month positive growth of 2.6%, while the top 10 companies experienced a slight decline of 0.9% [4] - Companies like China Resources, Jianfa, and China Railway Construction saw month-on-month increases exceeding 30% in September, while others like Longfor and Vanke faced declines of 30%-40% [5][6] Future Market Expectations - The new housing transaction volume is expected to remain low in October 2025, with a potential widening of year-on-year declines due to a high base from last year's rapid market rise [19] - The overall market is anticipated to face downward pressure, with second-hand housing transaction momentum slowing [19][20] Policy and Market Outlook - Current policies in major cities like Beijing, Shanghai, and Shenzhen are unlikely to change significantly in the short term, but long-term trends suggest a gradual easing of restrictions [26] - Potential policy measures include lowering loan interest rates and providing financial subsidies for mortgage loans to stimulate the market [26][27] Price Trends - The second-hand housing prices are currently in a rapid decline, particularly in first-tier cities, with no clear indication of when they will stabilize [25] - The high-end residential market (properties priced above 30 million yuan) is expected to remain stable, while the mid-range market (1 million to 1.5 million yuan) may face demand challenges [24] Additional Important Insights - The divergence between new and second-hand housing transactions is notable, with new housing supported by high-end private residences while second-hand housing is primarily driven by budget-conscious buyers [23] - The performance of the real estate market in September was influenced by last year's low base and the introduction of quality land parcels by local governments [20]

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 homes [1][2][4]. New Housing Market - In the week of September 15-21, Shenzhen's new housing market recorded 969 transactions, reflecting a 10% increase compared to the previous week [2]. - The proportion of luxury homes priced above 15 million yuan increased by 2.6 percentage points, indicating a growing demand in the high-end segment [2]. - The share of improved housing transactions in the 5 million to 8 million yuan range rose by 3 percentage points compared to August, showcasing a strong release of demand for upgraded living conditions [2][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 overall listing prices remained stable, with some areas experiencing slight increases, particularly in regions like Luohu and Nanshan [4]. - The high transaction volume in the second-hand market is facilitating 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 - There is a noticeable increase in inquiries and visits from potential buyers seeking improved housing options, indicating a shift in consumer behavior post-policy implementation [3]. - Experts believe that the new policy has effectively stimulated the market, and as weather conditions improve, demand for school district and marriage-related housing will further support market stability [4].

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 Viewpoint - The real estate market in China is experiencing a stark contrast between a temporary surge in luxury property sales and a continued decline in the overall housing market, indicating a complex and divided landscape [1][3][11] Policy Impact - Various government policies have been implemented to stimulate the housing market, including reduced down payments and interest rates, as well as direct subsidies for homebuyers [3][5] - These measures have led to a temporary increase in transactions in certain areas, such as a 38% rise in transaction volume for older homes in Hangzhou after the removal of purchase restrictions [5][6] Market Division - The real estate market is showing extreme division, with luxury properties experiencing a surge in demand, evidenced by a 184% increase in transactions for high-end homes in Shenzhen [8][9] - Conversely, the second-hand housing market is struggling, with significant price reductions required to facilitate sales, such as a 14% price cut in Shenzhen [8][9] Economic Role of Real Estate - The real estate sector, once a key driver of China's economy, is now facing significant challenges, with a reported 11.2% year-on-year decline in real estate development investment [11][12] - The contribution of land sales to local government revenue has decreased by 23.2% compared to peak levels, indicating a shift in the economic landscape [11][12] Future Market Outlook - The real estate market is expected to undergo a "threefold differentiation," with core first-tier cities maintaining stability while third and fourth-tier cities continue to face challenges [13][14] - The focus is shifting from speculative investment to a more rational approach centered on living quality, as the market adapts to changing consumer preferences [16][17]