According to the report released by Huatai Securities, as the base of last year decreased and policies gradually took effect, the YoY decrease in the sales area of new houses in 54 cities in June narrowed, and the YoY rate of second-hand houses in 26 cities was positive. From the leading indicators of Beike, the leading indicators of 50 cities are still adjusting, but several quantity and price indicators in first-tier cities have improved first, especially the news that the price of houses in Beijing and Shanghai has stopped falling, which conveys bullish signals and is expected to accelerate the expectation of the real estate market's recovery. We need to continue to track the continuity of the recovery of the core city's price and quantity, however.

Leading indicators showed signs of improvement in volume and price in first-tier cities in June.

According to the report released by Huatai Securities, as the base of last year decreased and policies gradually took effect, the YoY decrease in the sales area of new houses in 54 cities in June narrowed, and the YoY rate of second-hand houses in 26 cities was positive. From the leading indicators of Beike, the leading indicators of 50 cities are still adjusting, but several quantity and price indicators in first-tier cities have improved first, especially the news that the price of houses in Beijing and Shanghai has stopped falling, which conveys bullish signals and is expected to accelerate the expectation of the real estate market's recovery. We need to continue to track the continuity of the recovery of the core city's price and quantity, however. We are optimistic about the determination and strength of the real estate policy in this round, and the acceleration of the fundamental bottoming out in core cities is expected to promote the repair of high-quality company valuations. Focus on stable property developers who have more resources and improved product capabilities in core cities, as well as property management companies with performance resilience, stable cash flow, and generous dividend payouts.

High-frequency data: The YoY decrease in the sales area of new houses in June narrowed and the YoY rate of second-hand houses turned positive.

According to the report, last June, the YoY decrease in the sales area of new houses in 54 cities was -21% (compared with -35% in May), and the MoM was +21%. The YoY rate of second-hand houses in 26 cities rose by 13% in June (compared with -2% in May), and the MoM was +0.3%. From the high-frequency data, after the data fluctuations caused by the Dragon Boat Festival, the daily signing volume of new houses reached a seasonal peak at the end of the month, and the daily signing volume of second-hand houses gradually increased.

According to Beike Research Institute, in terms of quantity-related indicators: the second-hand house showing index of 50 cities decreased by 3% MoM to 26.8, but the first-tier cities increased by 2% MoM to 54.4; the sales office index of new houses decreased by 3% MoM to 16.6, but the first-tier cities increased by 14% MoM to 26.7; The expectation index of second-hand/new house brokers(KMI) decreased slightly MoM to 38.3/40.5, but the 626 Beijing policy took effect and KMI stopped falling, especially the second-hand house KMI in first-tier cities, which returned to the balance line. In terms of price-related indicators: the market vitality index of the second-hand house market, which reflects the trend of owners' listing prices, fell by MoM to 9.2; the discount rate of the transaction price relative to the listing price increased to 15.0%, but decreased to 14.6% MoM in first-tier cities; the YoY drop in the second-hand house price narrowed slightly by 1.3% compared to May, but increased by 0.4% and 1.2% MoM in Beijing and Shanghai respectively, pushing the first-tier cities up by 0.1% compared to the first quarter of this year, which is the first time that housing price stopped falling since the small peak in the first quarter of 2023.

According to Beike Research Institute, in terms of quantity-related indicators: the second-hand house showing index of 50 cities decreased by 3% MoM to 26.8, but the first-tier cities increased by 2% MoM to 54.4; the sales office index of new houses decreased by 3% MoM to 16.6, but the first-tier cities increased by 14% MoM to 26.7; The expectation index of second-hand/new house brokers(KMI) decreased slightly MoM to 38.3/40.5, but the 626 Beijing policy took effect and KMI stopped falling, especially the second-hand house KMI in first-tier cities, which returned to the balance line. In terms of price-related indicators: the market vitality index of the second-hand house market, which reflects the trend of owners' listing prices, fell by MoM to 9.2; the discount rate of the transaction price relative to the listing price increased to 15.0%, but decreased to 14.6% MoM in first-tier cities; the YoY drop in the second-hand house price narrowed slightly by 1.3% compared to May, but increased by 0.4% and 1.2% MoM in Beijing and Shanghai respectively, pushing the first-tier cities up by 0.1% compared to the first quarter of this year, which is the first time that housing price stopped falling since the small peak in the first quarter of 2023.

According to the data from Beike Research Institute, the cities with leading indicators include Shenzhen, Chengdu, Nanjing, Hangzhou, Shanghai, Xi'an, Taiyuan, and Tianjin. The cities with lower indicators include Shaoxing, Fuzhou, Wenzhou, Wuhu, Zhongshan, and Yinchuan.

According to the report released by Huatai Securities, as the base of last year decreased and policies gradually took effect, the YoY decrease in the sales area of new houses in 54 cities in June narrowed, and the YoY rate of second-hand houses in 26 cities was positive. From the leading indicators of Beike, the leading indicators of 50 cities are still adjusting, but several quantity and price indicators in first-tier cities have improved first, especially the news that the price of houses in Beijing and Shanghai has stopped falling, which conveys bullish signals and is expected to accelerate the expectation of the real estate market's recovery. We need to continue to track the continuity of the recovery of the core city's price and quantity, however. We are optimistic about the determination and strength of the real estate policy in this round, and the acceleration of the fundamental bottoming out in core cities is expected to promote the repair of high-quality company valuations. Focus on stable property developers who have more resources and improved product capabilities in core cities, as well as property management companies with performance resilience, stable cash flow, and generous dividend payouts.