China Property_ Takeaways from channel checks (residential & retail) in Beijing. Thu Feb 13 2025

Summary of Key Points from the Conference Call on China Property Industry Overview - The report focuses on the China Property market, specifically residential and retail sectors in Beijing [1][3]. Core Insights - Divergent Sales Performance: Sales performance varies significantly across districts. Core districts near metro stations and tech hubs show solid sell-through rates (>80%), while non-core districts like Daxing and Pinghu are underperforming [3][4]. - Conservative Pricing by Developers: Developers are cautious with pricing, often setting prices slightly below indicative prices. Home prices in Beijing have dropped approximately 20% since their peak, with mass-market products experiencing a decline of 20-30% [3][4]. - Home Purchase Restrictions (HPR): There are expectations for further easing of HPR in non-core areas, although core districts are likely to maintain current restrictions [4][5]. - Upcoming Affordable Housing Supply: The anticipated increase in affordable housing supply (70-80K units annually) may negatively impact first-home demand, which has already been weak [3][4]. Retail Sector Insights - Shopping Mall Performance: A shopping mall in Chaoyang District reported tenant sales growth exceeding 10% year-over-year in 2025, with categories like gold & jewelry and cosmetics outperforming [1][4]. - Consumer Trends: Despite a general consumption downgrade, mass-market positioned malls have not seen significant negative impacts. The mall aims for a 15% growth in tenant sales for the full year of 2025 [4]. Policy and Market Dynamics - Policy Easing Measures: Recent measures, such as lowering down payment ratios, have been effective in boosting first-home demand, but the impact of tax rate cuts has been minimal [4][5]. - Land Market Relaxation: Recent land sales have removed previous constraints, allowing for more flexibility in residential project development [4][5]. - Urban Village Renovation (UVR): There has been no significant acceleration in UVR or inventory purchases in Beijing, despite government calls for action [4][5]. Developer Recommendations - The report expresses a positive outlook on CR Land and COLI as preferred developers in the current market environment [1][5]. Additional Insights - Market Sentiment: Despite policy easing, market sentiment in low-tier cities remains stagnant, indicating a lack of meaningful recovery [3][4]. - Sales Volume Focus: Government priorities appear to be more focused on sales volume rather than home prices, aiming to stabilize the market [4][5]. This summary encapsulates the key findings and insights from the conference call regarding the current state and outlook of the China property market, particularly in Beijing.