HK Stock Market Move | In the afternoon, stocks in the real estate sector fell across the board. Institutions expect that the prices of new commercial housing will continue to be under pressure, and the differentiation between large and small cities may continue.

In the afternoon, the stocks of domestic real estate companies turned lower across the board. As of the time of writing, AGILE GROUP (03383) fell by 8.96% to HKD 0.61; RONSHINECHINA (03301) fell by 5.45% to HKD 0.26; SHIMAO GROUP (00813) fell by 7.37% to HKD 0.88; R&F PROPERTIES (02777) fell by 3.97% to HKD 1.21; SUNAC (01918) fell by 3.61% to HKD 1.6. In terms of news, Fitch Ratings expects that the operating environment for Chinese real estate companies will continue to be under pressure this year. The real estate industry is still plagued by serious structural problems, including high inventory of unsold housing and declining housing affordability for buyers. Despite recent policies aimed at boosting short-term market sentiment, the low rental yields in major citiessuch as those lower than mortgage ratesindicate that there is still room for further declines in property prices. Despite the government's efforts to boost buyer confidence, it is expected that the prices of newly built residential properties will still be under pressure by 2025. Haitong Securities stated that the real estate market as a whole may show some improvement by 2025, with the decline potentially narrowing. Beginning in 2021, the adjustment in China's real estate market has been significant. Referring to overseas experience, the speed of correction in real estate prices in China is relatively slow, but there is a larger adjustment in quantity, which is faster. Considering the changing trends in the homebuying population in China, the impact of the second-hand housing market, inventory issues, etc., it is believed that the overall real estate sector in China may see improvement by 2025, with the decline narrowing or possibly even better sales performance compared to prices. However, there will still be pressure to address investment in new construction. The differentiation between large and small cities may continue, with high-tier city prices still under pressure but showing resilience in terms of quantity, while lower-tier cities still face pressure in terms of real estate volume.