Recently, the real estate industry has gradually shown bullish signals, providing logical support for a new round of real estate cycle.

The Central Meeting highlighted speeding up inventory purchase and storage.

On August 7th, according to the Shenzhen Anju WeChat account, Anju Group plans to purchase commodity housing for use in indemnificatory apartments and collect commodity housing for indemnificatory residence projects in Shenzhen. As of July 30th, according to statistics from the China Real Estate Research Institute, more than 60 cities across the country have issued policies to purchase and collect residential property and use it for indemnificatory housing. The latest move in Shenzhen can be understood as the implementation of the spirit of the Central Meeting.

On July 30th, according to Xinhua News Agency, the Political Bureau of the Communist Party of China (CPC) held a meeting to analyze and study the current economic situation, deploy economic work in the second half of the year, and review the regulations on reducing the burden of formalism for the grassroots. In terms of real estate, the Political Bureau continued the direction of real estate work in the first half of the year, such as guaranteeing quality buildings, digesting inventory, optimizing increment, acquiring commodity housing inventory and accelerating the construction of new models. It is worth noting that the meeting emphasized the active support for the acquisition of commodity housing inventory for use in indemnificatory apartments. This is the first time it has been mentioned in high-level meeting statements. Acquiring commodity housing inventory for use in indemnificatory apartments may become the focus of the real estate industry in the second half of the year, and it is expected that the scope of purchase and storage will gradually expand and speed up.

Some analysts believe that acquiring commodity housing inventory for use in indemnificatory apartments has the effect of "killing three birds with one stone" at this stage. It can help local governments solve inventory problems, relieve the capital chain pressure of real estate companies, and safeguard the housing rights of low-income groups.

Some companies have begun to actively acquire land, reviving the phenomenon of buying land at sky-high prices.

On the afternoon of August 7th, the fourth batch of land supply activities in Pudong New Area, Shanghai was held at the Shanghai Real Estate Building. Greentown won the Xh128D-07 plot in Xuhui District with a total price of about 4.8 billion yuan, a floor price of 0.131 million yuan/square meter, and a premium rate reaching the highest limit of 30%. The plot broke the record for the most expensive domestic land king in Shanghai set by Ronshine China in 2016. Since this year, Greentown has been active in the land market. In the first seven months of this year, the equity land acquisition amount of Greentown has reached 22.8 billion yuan, second only to Sino-Ocean Group and ranking second in the industry.

In July, only 30% of the top 100 real estate companies are still active in the land market. But from a monthly perspective, as the pace of land supply accelerated in some high-energy-level cities and more low-density plots were launched, some large state-owned enterprises actively replenished the land stock in July. Poly Developments and Holdings Group actively collected inventory in cities such as Beijing and Shanghai, with a monthly land acquisition amount of 14.75 billion yuan, much higher than other real estate companies. The monthly investment amount of Greentown and China Merchants also exceeded 3 billion yuan. From May to July, Vanke added four projects in Shenyang, Xuzhou, and Shanghai. The land acquisition amount of typical real estate companies has rebounded for two consecutive months at the bottom. The single-month investment amount of the top 30 real estate companies under close monitoring reached 34.8 billion yuan, a month-on-month increase of 21%, second only to the peak in April this year.

After the Third Plenum of the 20th CPC Central Committee and the Central Political Bureau meeting made important arrangements for the real estate market, the industry's expectations for the release of new real estate policies have risen. In the overall investment environment, top companies have begun to take advantage of the low point to replenish core high-quality assets, laying a solid foundation for optimizing asset structure. Industry insiders believe that in the current land market situation, the appearance of the single price "land king" has a very strong signal significance and also reflects more capital paying attention to high-quality cities and high-quality plots, which has a positive effect on enhancing confidence in the real estate and key cities.

With the adjustment of various restrictive policies, second-hand housing in first-tier cities has shown signs of recovery. On July 21st, the Central Committee of the Communist Party of China released the "Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting the Modernization of China" which allowed relevant cities to cancel or reduce housing purchase restrictions. At present, most provinces and cities have cancelled their restrictions. The latest data on second-hand housing transactions shows that after the "6.26 New Policy" in Beijing, there were 15,575 second-hand housing transactions in July, a month-on-month increase of 3.9% and a significant year-on-year increase of 60.3%. From the monthly data this year, the transaction volume in Beijing exceeded 150,000 units in July, reaching a new high since March 2023. Shanghai's July transaction volume was 190,000 units, a decrease of 24.9% compared to last month's 260,000 units, but still at a historically high level.

According to the latest statistics from institutions such as China Index Research Institute and Cushman & Wakefield Research Center, the total sales volume of the top 100 real estate companies was 2,390.94 billion yuan, a year-on-year decrease of 40.1%, a decrease of 1.5 percentage points from last month, and a continuous five-month narrowing of the decline. Overall, the sales of the top 100 real estate companies showed a marginal improvement.

With the adjustment of various restrictive policies, the heat of second-hand housing in first-tier cities has shown signs of recovery. On July 21st, the Central Committee of the Communist Party of China released the "Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting the Modernization of China" which allowed relevant cities to cancel or reduce housing purchase restrictions. At present, most provinces and cities have cancelled their restrictions. The latest data on second-hand housing transactions shows that after the "6.26 New Policy" in Beijing, there were 15,575 second-hand housing transactions in July, a month-on-month increase of 3.9% and a significant year-on-year increase of 60.3%. From the monthly data this year, the transaction volume in Beijing exceeded 150,000 units in July, reaching a new high since March 2023. Shanghai's July transaction volume was 190,000 units, a decrease of 24.9% compared to last month's 260,000 units, but still at a historically high level.

It is worth noting that while many projects are reducing prices to promote sales in the current real estate market environment, some projects are increasing prices against the trend. According to media reports, Sichuan Zhongmao Real Estate Development Co. recently issued a notice on the price increase of Jinjiang Song Residence. It decided to adjust the sales average price of the Jinjiang Song project starting from August 5, 2024, with an increase of 2%. The developer stated that the project has a higher market premium potential and increased the housing price to further enhance the project value and ensure the output value of the project. Industry experts believe that the price adjustment is a reasonable operation, which can guide the market to supply high-quality commodity housing, promote the optimization of the housing supply structure, better meet the housing needs for residents' improvement, and have positive significance for the healthy development of the real estate market. According to statistics, since this year, cities such as Shenyang, Lanzhou, Zhengzhou, and Ningde have clearly stated that they will no longer implement sales price guidelines for new commodity buildings, that is, canceling sales price caps.

Wang Xi, manager of Jiuxing Investment Fund, believes that the real estate sector has reached the historical bottom. Combined with the current data, the sector has a certain logic for rebounding. In the short term, it is necessary to pay attention to the continuity and strength of policy catalysis. There will be opportunities for value repair in the industry. In the medium and long term, attention should be paid to the evolution of real estate business models and the long-term capital return brought by excellent companies and the value re-evaluation of the companies themselves.