Jinwu Financial News | According to CMB International Development Research Report, sales of new homes were weak during the May 1st Golden Week. The average daily transaction area of 30 cities was about 60,000 square meters during the holiday season, which only recovered to 39% of the 2023 level. Mainly affected by low-tier cities, the average daily turnover in third-tier cities reached only 36% in 2023, and 41% in Tier 1 and 2 cities.
During Labor Day, the bank conducted research on real estate agents in Beijing and mainly observed: 1) the number of visitors has increased, but transaction conversion is still slow; 2) there are two main reasons why potential buyers maintain a wait-and-see attitude. One is that housing prices are still in a downward trend, and buyers want to wait for a chance to break the bottom; second, discounts on new housing projects are gradually increasing, and at the same time, the proportion of existing homes is gradually increasing, and some buyers are considering buying new homes instead.
According to the bank, further policy relaxation was carried out after the Shenzhen holiday, mainly targeting families with two or more children and social security people with non-Shenzhen domicile registration for at least one year. Judging from the demand released by the bank, Shenzhen > Shanghai > Beijing. The bank believes that although marginal demand brought about by small steps of relaxation will not lead to a significant boost in sales, it can also prevent a sharp decline from a high point similar to the one in April last year. The bank expects a positive policy tone and trading sentiment in the real estate sector to be transmitted to the sales level, bringing about effective improvements in the fundamentals of the industry.
In terms of stock selection, the bank favors property management companies that benefit from the stock market, such as China Resources Vientiane Life (01209), Poly Industries (06049), and Wanwuyun (02602), as well as the intermediary Shell (02423) and the contract construction company Greentown Management (09979); the developer recommended China Resources Land (01109), which has long-term holding value.