Core Insights - The real estate market is experiencing a significant supply reduction, with a nearly 50% decrease in supply in October compared to September, yet transactions have slightly increased by 2% [1][5][4] - Demand remains present in specific cities, with notable transaction growth in cities like Guangzhou, Chengdu, and Xiamen, where new home sales have increased by over 10% month-on-month [1][8][11] - The market is undergoing a structural adjustment, focusing on inventory reduction and the acquisition of idle land, rather than returning to previous peak levels [2][3] Market Overview - The overall market is in a "shrinking" phase, having experienced nearly four years of scale contraction since 2022, with no expectation of returning to the peak levels of 2020-2021 [2][4] - The average annual new housing demand in China is estimated to be around 880 million square meters [2] - The supply in 30 key cities in October was 5.22 million square meters, marking the second-lowest level of the year [4] City-Specific Performance - In October, 20 out of 30 key cities saw an increase in residential transaction volume, with 12 cities experiencing growth of over 10% [8][9] - Cities like Dongguan and Huizhou reported transaction increases exceeding 50%, attributed to low previous bases and concentrated project registrations [8][11] - Continuous month-on-month growth was observed in cities such as Guangzhou, Xiamen, and Xi'an, with Xi'an maintaining a high transaction volume above 500,000 square meters [9][12] Demand Dynamics - The cities with sustained transaction growth generally have a high absorption rate, with cities like Chengdu and Xi'an showing rates above 30% [11][12] - In Xi'an, the demand is driven by affordable housing products, while high-end products are experiencing a focus effect [12][16] - The market is shifting towards a model of "sales determine production," indicating a need for high-quality offerings in both affordable and luxury segments [16]