中国房地产行业：10 月数据- 投资、竣工与房价跌幅扩大-China Property_ Oct NBS_ Drop Accelerated in Investment, Completion and Home Prices

Summary of China Property Market Conference Call Industry Overview - The conference call focused on the China Property market, highlighting significant declines in investment, completion rates, and home prices as reported by the National Bureau of Statistics (NBS) for October 2025. Key Points and Arguments Investment and Sales Trends - Real Estate Investment (REI) dropped by 22.5% year-over-year in October, worsening from a 21.6% decline in September, marking the sharpest decline since November 2022 [1] - Completion rates fell by 28% year-over-year, a significant drop from a 1.5% increase in September [1] - New construction starts decreased by 29% year-over-year, compared to a 14% decline in September [1] - Residential sales saw a 25% decline, with the gross floor area (GFA) sold down 20%, both representing the largest retreats since May 2024 [1] - The 70-cities price index showed a widening decline, with new home prices down 0.5% month-over-month and secondary home prices down 0.7% month-over-month [1] Macro Economic Context - October exports experienced a 1.1% decline, the first drop in eight months, while fixed asset investment (FAI) missed expectations with a 12% decline [1] - Credit data remained soft, with new loans and total social financing (TSF) at RMB 0.2 trillion and RMB 0.8 trillion, respectively, below consensus estimates [1] - Retail sales showed stability with a 2.9% increase, while the Consumer Price Index (CPI) and Producer Price Index (PPI) exceeded expectations [1] Local Government Initiatives - Local governments are promoting high-quality property development under the 15th Five-Year Plan, with new rules linking completed home sales to new land sales [2] - For instance, Pingjiang County in Hunan requires completed home sales for new land acquisitions, with completed homes accounting for 62% of local sales [2] - Fujian's Fuzhou is linking pre-sales approvals to property firms' credit profiles, and Guangzhou mandates 100% pre-fabrication for new residential lands starting in 2026 [2] Market Dynamics - Secondary sales in 18 key cities dropped by 29% year-over-year in October, with average weekly volumes at 21,000 units, the second-lowest year-to-date [3] - Listings in 39 cities remained flat month-over-month, but Tier-1 cities saw a 1.5% increase [3] - The flexibility in secondary price cuts may lead to continued price weakness and shift demand from new homes to the secondary market [3] Sector Outlook - The property sector is expected to experience range-bound trading, with limited new property policies anticipated apart from execution urgencies [4] - Property sales are likely to remain soft in Q4 2025 due to high bases and limited support from easing measures in low-tier cities [4] - However, top-10 cities are showing mild growth, with 82% of listed companies' land acquisitions occurring in these areas, and luxury home sales are outperforming with improved margins [4] - Preferred investment targets include companies with luxury and quality products, such as Jinmao, C&D, CRL, and COLI, which has shown strong sales in Tier-1 cities [4] Additional Insights - The National Residential Inventory reached 396 million sqm by October 2025, indicating a significant amount of unsold inventory [24] - The transaction amount for overall real estate in October was RMB 598 billion, reflecting a 25.5% decline year-over-year [9] - The average weekly primary transaction volume in October was down 35.4% year-over-year, indicating a significant slowdown in market activity [27] Conclusion The China property market is facing substantial challenges with declining investment, sales, and prices. Local government initiatives aim to stimulate high-quality development, but the overall outlook remains cautious, particularly for the remainder of 2025. Investors are advised to focus on companies with strong fundamentals and luxury offerings amidst the ongoing market volatility.