中国房地产-9 月市场延续疲软态势；政策预期略有上升-China Property Monthly Tracker_ Sep continued market softness; policy expectation inches up

Summary of Key Points from the China Property Monthly Tracker Industry Overview - The report focuses on the Chinese property market, highlighting trends in primary and secondary sales, construction activities, and developer strategies. Core Insights and Arguments 1. Sales Performance: - In September 2025, nationwide primary sales volume and value decreased by 11% and 12% year-over-year (yoy), respectively, which was in line with expectations. However, secondary sales volume increased by 16% yoy, exceeding expectations [2][10][28]. - The average selling price (ASP) for primary properties declined by 0.4% month-over-month (mom), while secondary ASPs fell by 0.6% mom, indicating continued pricing weakness [10][28]. 2. Construction Activities: - Construction activities were generally better than expected, with new starts declining by 14% yoy in September, while completions showed a positive trend with a 1.5% yoy increase [10][28]. - Property fixed asset investment (FAI) saw a significant decline of 21% yoy in September, marking a record high decline for a single month since 2023 [2][10]. 3. Developer Strategies: - Developers' land acquisition profitability improved slightly month-over-month, with an average of 54% of contract sales being allocated to new land acquisitions, carrying an average project-level gross profit margin (GPM) of 26% [11][78]. - Developers are focusing on strategic regions, particularly in Tier-1 and Tier-2 cities, which accounted for 74% of their land acquisitions [11][81]. 4. Market Expectations: - Looking ahead to October, expectations include continued price weakness, particularly in secondary ASPs, while primary ASPs in high-tier cities may remain more resilient [3][12]. - The anticipated decline in primary transaction volume and value is expected to moderate, while secondary transaction volume is projected to revert to negative territory due to unfavorable base effects [3][12]. 5. Policy and Economic Environment: - There is rising market expectation for new policy support to the housing sector amid ongoing market softness and uncertainties in US-China trade policies [4][10]. - Upcoming major government conferences may lead to policies aimed at boosting aggregate demand, which could positively impact the housing market [4][10]. Additional Important Insights 1. Liquidity Challenges: - Developers are facing a liquidity gap estimated at Rmb3.3 trillion for 2025, which is critical for their operational sustainability [59][62]. - The funding gap is primarily driven by difficulties in selling aged inventory and competition from new projects, which are more appealing to buyers [59][62]. 2. Demand-Side Indicators: - The overall demand score for the property market slightly dropped to 39 out of 100, indicating a challenging environment for home purchases [58][60]. - Home affordability remains a concern, with historical trough-level home purchase costs and potential for more affordability-boosting measures [58][60]. 3. Market Sentiment: - Sentiment in the secondary market has deteriorated, with a decline in new home search activity and a slow turnover pace in secondary transactions [58][60]. 4. Geographic Diversification: - Developers are diversifying their land acquisition strategies geographically, with notable activity in lower-tier cities, reflecting a shift in focus to areas with potential growth [19][81]. This summary encapsulates the key points from the China Property Monthly Tracker, providing insights into the current state and future expectations of the Chinese property market.