CITIC Construction Investment: Starting a new chapter in the development of the real estate industry, leading high-quality enterprises are expected to continue to grow steadily

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that in 2026, China's real estate system underwent major changes. With the introduction of the 828 new property market policy, the old model of “high leverage, high turnover, and off-plan housing pre-sale”, which had been in operation for more than 30 years, came to an end. Referring to overseas experience, real estate companies eventually moved from development and sales to asset management and housing services. As the dividends of REITs and asset securitization systems continue to be released, domestic commercial asset management leaders have emerged, and there is still plenty of room for future development. At the same time, as support policies related to stopping the decline and stabilizing continue to be implemented, the core city property market has now changed positively since the beginning of the year. Referring to Hong Kong's property market development experience, after the pre-sale system was tightened, the competitive advantage of leading developers became more obvious. In addition, second-hand transactions account for more than 50%, which is beneficial to leading trading intermediaries; the performance of some high-quality companies continues to grow steadily, and they are actively returning dividends to shareholders, and the dividend value is prominent. A new chapter in the development of the industry has begun, the business environment has changed, enterprise differentiation has intensified, and we are optimistic about high-quality enterprises on the commercial asset management, leading development, and service circuit.

CITIC Construction Investment's main views are as follows:

The 828 new property market policy was introduced, the basic real estate system was restructured, and demand-side support policies were introduced at an accelerated pace. Due to changes in the supply and demand relationship in the industry, the shortcomings of the high-leverage and high-turnover model have been systematically exposed, and the development and sales model supported by real estate companies in China generally used leverage in the past is unsustainable. On August 28, 2026, five ministries and commissions issued a new property market policy, which restructured the basic system of the industry, using the existing housing sales system, the host bank system, and the project company system as the three cornerstones, supporting five administrative measures. Demand-side support policies were also introduced at an accelerated pace in September, including the official implementation of the “State Council Decision to Amend the 'Housing Provident Fund Administration Regulations'”, the implementation of nationwide mortgage interest rate discounts, and potential buyers are expected to accelerate their entry into the market.

Referring to overseas experience, real estate companies eventually moved from development and sales to asset management and housing services. As the dividends of REITs and asset securitization systems continue to be released, domestic commercial asset management leaders have emerged, and there is broad scope for future development. Looking at mature global markets, in all economies that have gone through a complete cycle, real estate companies have eventually moved from development and sales to asset management and residential services. Through the anti-cyclical nature of commercial real estate business and its own operating cycle, Japan's Mitsui Real Estate has taken advantage of the development of the Japanese REITs market and the long-term low interest rate environment to vigorously expand its operational business and asset management business. CapitaMall Singapore has formed a closed loop of asset management throughout the “fund+asset management” cycle. At this stage, China's real estate industry is shifting from development and sales to operation and ownership. The focus of capacity is shifting from construction to operation, especially in the shopping center business. Leading operators have formed differentiated competitiveness.

Core cities took the lead in stopping the decline and stabilizing, benefiting leading development companies. Since the beginning of the year, the core city property market has now changed positively, with impressive transaction performance in core cities represented by Shanghai; in terms of prices, housing prices in first-tier cities have taken the lead in stopping falling and stabilizing; furthermore, since this year, rents in Shanghai have led the rise, and rent-to-sales ratios form the bottom support for housing prices. Referring to Hong Kong's property market development experience, after the pre-sale system was tightened, the competitive advantage of leading developers became more obvious. In 1994, Hong Kong took the initiative to tighten the pre-sale system. At this stage, the market share of Hong Kong's leading housing enterprises was further increased. The accumulation of abundant land reserves, lower financial costs, and strong bargaining power were the main reasons for maintaining a high market share.

A new chapter in the industry has begun, the business environment is changing, enterprise differentiation is accelerating, and we are optimistic about high-quality enterprises on the commercial asset management, leading development, and management service circuit.

Risk warning:

Policy implementation falls short of expectations; sales fall short of expectations; carry-over falls short of expectations; credit repair of housing enterprises falls short of expectations; structural risks caused by supply gaps.