According to the Futu Securities app, mainland real estate stocks continue to decline. As of the time of writing, Zhongliang Holdings (02772) fell 3.13%, to HKD 0.155, China Overseas Development (00688) fell 2.81%, to HKD 13.84, Sino-Ocean Group (03377) fell 2.2%, to HKD 0.445, and China Vanke (02202) fell 1.18%, to HKD 5.02.

On the news front, the National Bureau of Statistics recently released statistics on the investment and sales of commodities housing from January to May 2024. From January to May, the sales area of commodities housing was 366 million square meters, a year-on-year decrease of 20.3%, of which the sales area of commodity residences decreased by 23.6% year-on-year. From January to May, the sales amount of commodities housing was RMB 3.57 trillion, a year-on-year decrease of 27.9%, of which the sales amount of commodity residences decreased by 30.5% year-on-year. In addition, from January to May, the investment in real estate development was RMB 4.06 trillion, a year-on-year decrease of 10.1%, and the decrease continued to expand; the actual funds of real estate development enterprises were RMB 4.26 trillion, a cumulative year-on-year decrease of 24.3%.

Ping An Securities pointed out that real estate sales, investment, and construction in May continued to be weak year-on-year, and the repair of the fundamentals still requires sustained efforts from the policy side and improvement of the macro-environment. The sector has entered a period of consolidation, with on one hand, holders based on their expectations of future policies are less likely to reduce their positions after the previous adjustment; on the other hand, although the sector has seen some correction, it still has a certain increase compared to the end of April, and is still in the window period of observing the effects of the previous policies. The probability of large-scale policy issuance in the short term is small, and non-holders are still mainly in a wait-and-see mode.