Jinwu Financial News | Citi pointed out in its latest research report that data from the China National Bureau of Statistics in November 2024 showed that the completed area of the Chinese real estate market has increased, but real estate investment has declined, new construction is still weak, and the decline in housing prices has decreased. Specifically, the area completed in November fell 39% year on year, the biggest drop since this year, partly due to delays in completion due to the epidemic at the end of 2023; new construction area fell 26.8% year on year; housing prices in the primary and secondary markets in 70 cities all fell, but the decline narrowed; sales increased 1.4% year on year, while real estate investment fell 11.6% year on year.
Citi is cautious about China's real estate industry as a whole. It is expected that during the period 2025-2027, the real estate market will go through an inventory removal cycle, and prices are expected to stabilize, but real estate investment is expected to continue to decline. As new construction starts and land sales both hit new lows since 2005, it is expected that the size of the new housing market may decline further, which will have a negative impact on downstream construction and completion. Citi emphasized that policy stability and demand-side support are critical to the recovery of the real estate market.
Citi expects that with the gradual implementation of policies and the acceleration of implementation of new policies by local governments, the real estate market in some cities will show signs of short-term recovery. For example, implementation of new policies has begun to accelerate in places such as Hangzhou, Hefei, Guangzhou, and Foshan. Citi has adjusted the ratings and target prices of some of these companies. For example, the target price for Country Garden (02007) is HK$6.00, which is rated “hold”; the target price for China Overseas Development (00688) is HK$32.70, rated as “hold”; and the target price for China Resources Land (01109) is HK$2.00, and the rating is “sell”.
【券商聚焦】花旗：中国房地产市场竣工面积增加 房地产投资下降 新开工疲软 价格跌幅减小
【Brokerage Focus】 Citigroup: In China, the completed area of the Real Estate market is increasing, Real Estate Investment is declining, new construction is weak, and the price drop is decreasing.
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