Guolian: The effects of the policy are evident and there has been marginal improvement in the sales of the real estate market in October.

Guolian released a research report stating that, according to the national statistics, the national real estate market report from January to October 2024 showed that the year-on-year declines in sales area, sales amount, and completed area have all narrowed. On the investment side, real estate developers are still acquiring land at historically low levels, and development investment and construction areas may continue to stabilize. With the advancement of government debt and land reserve policies, the completed area is expected to gradually stabilize. Since the end of September, positive policies for the real estate market have been frequent, boosting market confidence and leading to a slight sales recovery. Looking ahead, on November 13th, the Ministry of Finance and others announced adjustments to housing taxes and fees, directly reducing the cost of buying a home for residents, which may help maintain market enthusiasm. Combined with the year-end sprint of real estate companies, the sales side is expected to continue to recover. Guolian's main points are as follows: Industry events The National Bureau of Statistics released the basic situation report on the national real estate market from January to October 2024. From January to October, the sales area, sales amount, investment amount, new construction area, and completed area of commercial housing were 779.3 million square meters/768.55 billion yuan/863.09 billion yuan/61.227 million square meters/41.995 million square meters, with year-on-year changes of -15.8%/-20.9%/-10.3%/-22.6%/-23.9%. Overall, the year-on-year declines in sales area, sales amount, and completed area have all narrowed. Investment side: Development investment fluctuations, narrowing decline in completed area From January to October 2024, the total national real estate development investment reached 863.09 billion yuan, with a year-on-year change of -10.3%, a 0.2% narrowing compared to the year-on-year decline in the first nine months. The total new construction area of houses was 61.227 million square meters, with a year-on-year change of -22.6%, a 0.4% widening compared to the first nine months. The total completed area of houses was 41.995 million square meters, with a year-on-year change of -23.9%, a 0.5% narrowing compared to the first nine months. In terms of the land market, according to data from a Chinese real estate research institute, the sales area of residential land in 300 cities in October was 35.81 million square meters, a year-on-year change of -25.5%. Real estate developers are still acquiring land at historically low levels, and development investment and construction areas may continue to stabilize, with the advancement of government debt policies and land reserves. Sales side: Policy effects are evident, sales have slightly recovered From January to October 2024, the total sales area of commercial housing nationwide was 779.3 million square meters, a year-on-year change of -15.8%, narrowing by 1.3% compared to the first nine months. The total sales amount of commercial housing nationwide from January to October was 768.55 billion yuan, a year-on-year change of -20.9%, narrowing by 1.8% compared to the first nine months. In October, the sales area of commercial housing was 76.46 million square meters, a year-on-year change of -1.6%, with a narrowing decline of 9.4% compared to the previous month; the sales amount of commercial housing was 797.5 billion yuan, a year-on-year change of -1.0%, with a narrowing decline of 15.3% compared to the previous month. Since the "stabilizing the stop" concept was first mentioned at a political meeting on September 26th, positive real estate policies have been frequent, and the policy effects were reflected in the data for October. Funding side: Continuous improvement in available funds, marginal recovery in sales proceeds From January to October 2024, the total sources of funds for real estate development enterprises in China amounted to 872.35 billion yuan, a year-on-year change of -19.2%, with a 0.8% narrowing compared to the first nine months, marking the seventh consecutive month of narrowing decline. In October 2024, the total sources of funds for real estate development enterprises were 833.7 billion yuan, a year-on-year change of -10.8%, with a narrowing decline of 7.7% compared to September. From January to October, pre-orders and personal mortgage loans experienced a year-on-year change of -27.7% and -32.8% respectively, with a narrowing decline of 2.1% for both compared to the first nine months. With the gradual implementation of land and existing housing reserves, the financial situation of real estate companies is expected to improve. Targets: Focus on key layouts in first-tier and core second-tier cities, focusing on improvement-oriented products, and real estate companies with the ability to continuously acquire land, such as GREENTOWN CHINA (03900), C&D INTL GROUP (01908), Hangzhou Binjiang Real Estate Group (002244.SZ), etc. Also, pay attention to real estate intermediary platforms with core competitiveness that benefit from continuous policy support, such as 5i5j Holding Group (000560.SZ). Risk warning: Policy effects may not meet expectations; increased liquidity risk for real estate developers; market confidence may not meet expectations.