CICC: Observe whether the performance of core cities can stabilize and progress in the second half of the year, suggest actively layout the real estate sector

The Zhitong Finance App learned that CICC released a research report saying that on July 30, the Political Bureau of the CPC Central Committee analyzed and studied the current economic situation and economic work, and proposed “stabilizing the real estate market” in terms of real estate. The probability of drastic changes in the real estate policy environment in the short term is limited. It is recommended to focus on the natural interpretation of industry fundamentals and policy developments related to expanding domestic demand at the macro level. Currently, the market is watching the real estate sector and waiting for a catalyst. The bank gives priority to recommending high-quality leaders with excellent asset quality, good sales expectations, and strong performance stability. At the same time, it also suggests opportunities to make up for gains when the beta was launched that recently surpassed the target due to performance and operating performance.

CICC's main views are as follows:

The trend in the real estate market has basically remained stable since this year, and the policy continues the previous trend

In terms of transaction volume, sales of high-frequency new and second-hand housing increased by about 10% year-on-year in July. Among them, second-hand housing achieved the same increase in sales for four consecutive months since the second quarter; in terms of housing prices, the month-on-month decline in housing prices has remained stable at around -0.7% since this year, which is nearly half narrower than 2H25. Structurally, it is mainly driven by some ultra-high and high-energy cities where the second-hand housing supply and demand structure continues to be optimized. The current Politburo meeting continued the statement of “stabilizing the real estate market”. Compared with the previous statement of “effort/focus on stabilizing the real estate market,” the bank believes that the probability of drastic changes in the real estate policy environment in the short term is limited, and suggests focusing on the natural interpretation of industry fundamentals and policy developments related to expanding domestic demand at the macro level.

In the second half of the year, we will focus on observing whether the performance of the core city property market is progressing steadily

The bank believes that the current endogenous restoration of the real estate market fundamentally stems from clearing the supply side of leading cities rather than requiring exogenous improvements in the traditional sense. Therefore, the repair speed may be slower than the previous cycle, but the basic foundation formed by this is relatively solid, which is more beneficial to the long-term healthy development of the real estate market. Looking ahead, the bank believes that under a relatively stable expected environment and a low base, the year-on-year performance of transaction volume in the second half of the year may be weak, but the catalyst expected by the market may be more obvious, such as housing prices in core cities starting to rise. It is worth reminding that the number of listings in Shenzhen in the past month was similar to that of Shanghai and Beijing before, beginning to enter a downward range, and continue to observe the continuation of the trend and follow-up reaction on the price side.

It is recommended to actively lay out the real estate sector

Since June, the valuation of core targets has been fully adjusted, negative factors in short-term interim reports have been released to a certain extent, and liquidity in traditional industries has also improved. Currently, the market is watching and waiting for a catalyst for the real estate sector.

risk

The supply and demand structure of core cities is poor; the policy environment fluctuates greatly; and liquidity conditions deteriorate.