On August 17th, 2024, HSBC Research released a report stating that mainland second-hand real estate sales are increasing and that mainland real estate sales are expected to resume year-on-year growth in September, with a preference for real estate agency company Ke Holdings (NYSE: BEKE; HKEX: 2423), and giving a 'buy' rating.

HSBC believes that second-hand house prices in Beijing, Shanghai, Hangzhou, and Nanjing have shown a monthly increase in June, which has gradually stabilized prices, indicating the first stage of recovery. Among the eight major cities tracked by HSBC, five cities recorded higher daily sales in July. At the same time, sales of new houses have slowed down since July, but this is within expectations, as developers offered preferential terms at the end of June, and buyers are also waiting for more supportive policies.

In addition, HSBC believes that mainland real estate financing is more smooth and cheaper, and low-interest costs enable high-quality developers to improve their debt situation and continue land investment. The risk-return ratio of mainland real estate stocks of state-owned enterprises has become more attractive.

Recently, data released by the National Bureau of Statistics showed that the decline in real estate sales area and transaction amount in June 2024 narrowed by 6.2 and 12.1 percentage points respectively from May, indicating that the market is in the process of bottoming out and repairing. Against the backdrop of a stabilizing national market, first-tier city real estate performance is particularly impressive. In June, new house prices in Shanghai rose by 0.4% MoM and 4.4% YoY; Beijing and Shanghai second-hand house prices saw their first increase after consecutive declines, rising 0.2% and 0.5%, respectively.

In the future, as first-tier cities' real estate markets heat up, their radiation effects are expected to drive the recovery of surrounding second- and third-tier city markets, further promoting the overall recovery of the national real estate market.