Ke Rui: The year-on-year transactions in January and February may remain flat or rebound, and the trend of market stabilization and rebound is still evident.

In January 2025, more than half of the month has passed, and the Spring Festival is approaching. Ke and Ray Real Estate released a research report analyzing the current real estate market situation. Overall, in January 2025, the real estate market experienced a cyclical decline, but it still showed some growth compared to the same period in January 2024 and the Spring Festival month of February 2024. The market showed a trend of stabilizing after the decline, with the overall increase in second-hand properties slightly better than new properties. Looking ahead, Ke and Ray believes that the period from January to February coincides with the Spring Festival holiday, and a steady decline in transactions compared to December 2024 is a high probability event. However, based on the low base last year, the year-on-year comparison may remain stable or turn positive, and in the short term, cities such as Shanghai, Shenzhen, and Hangzhou can maintain high market momentum relying on the popularity of new properties. On the new property front, the total transaction volume in 37 cities in the first half of January 2025 reached 3.87 million square meters, a 45% decrease compared to December 2024, with a slight increase of 1% year-on-year compared to January 2024, and a 47% increase compared to February 2024. The decline in the transaction volume in the second-hand market was significantly smaller than that in the new property market, with the market momentum continuing at a high level. According to CRIC monitoring data, the total transaction volume in 23 key cities reached 4.79 million square meters, a 22% decrease compared to December 2024, with a steady increase of 27% year-on-year compared to January 2024, and a 132% increase compared to February 2024. In the first half of January, the transaction volume in both new and second-hand properties decreased by 45% and 23% respectively. The heat in first-tier cities increased by 57% and 45% respectively. Looking at different tiers, the policy effects in first-tier cities are still evident, with the average daily transactions in the first half of January 2025 decreasing by 27% compared to December 2024, and increasing by 57% year-on-year compared to January 2024, achieving a doubling compared to February 2024. In terms of tiers, although the decline in first-tier cities is slightly higher than second and third-tier cities, the increase compared to January and February 2024 is 45% and 183% respectively. The enthusiasm of the market transactions remains high and continues to fluctuate at a high level. In cities such as Shanghai, Shenzhen, Guangzhou, and Hangzhou, transactions of both new and second-hand properties are leading the country. There is no significant cooling in Shanghai and Shenzhen. Focusing on the transaction situation in the first half of January 2025, it can be seen that cities such as Shanghai, Shenzhen, and Hangzhou promoted the market's high heat through "quality improvement and reduced supply" in the new property market. In terms of second-hand properties, Shanghai, Shenzhen, and Hangzhou showed outstanding performance, with an increase of more than 40% year-on-year in January 2024, achieving more than double the growth compared to February 2024. As cities directly benefiting from new policies, Shanghai and Shenzhen have not shown a significant decline in daily transactions of new and second-hand properties since January 2025. The market momentum continues in the short term, with high-quality new properties entering the market to maintain market momentum, while second-hand properties maintain high transactions through price adjustments. In the first half of January, promoting quality and reducing supply of new properties in cities such as Shanghai, Shenzhen, and Hangzhou has contributed to the market's high heat. Projects in Shanghai and Hangzhou have an average disposal rate of more than 60%, with Shanghai increasing by 18% compared to December 2024 and Shenzhen slightly decreasing by 6%, but the average disposal rate in the first half of January 2025 is significantly better than January and February 2024 and the entire year of 2024. On the other hand, the market heat in cities such as Beijing and Guangzhou has clearly declined, with the disposal rate only slightly higher than the Spring Festival month of 2024, showing insufficient momentum. Core cities such as Shanghai, Shenzhen, and Hangzhou continue to experience differentiation in projects, mainly relying on high-quality improvement projects in core areas and cost-effective demand-oriented projects to support market heat. The table below lists projects with a disposal rate of more than 60% in Shanghai, Shenzhen, and Hangzhou, showing that: Hot-selling projects generally fall into two categories: one is high-end and improvement projects in core areas, such as Shanghai Huangpu District Shanghai First Court (Jinyuan) and Shenzhen Bao'an District Urban Minghui Garden Phase II, with prices exceeding 100,000 yuan/square meter, achieving hot sales based on regional and product strengths; the other is cost-effective demand-oriented projects, generally in average locations, mainly achieving hot sales based on price advantages, such as Shenzhen Longgang District Yueyunjing Plaza and Hangzhou Linping District Binjiang Hangzhou Iron and SteelBin Hang Binchen City and other projects.