Open Source Securities: In August, new home prices in Shanghai continued to lead the rise, while the year-on-year decline in second-hand home prices narrowed

According to the Zhitong Finance APP, Kaiyuan Securities released a research report stating that in August 2025, the month-on-month decline in new home sales prices in 70 cities remained stable, while the year-on-year decline narrowed, with first-tier cities experiencing a reduced decline in new home prices. In terms of second-hand homes, the month-on-month decline in sales prices expanded, while the year-on-year decline narrowed. From the performance of the key 35 cities in the first and second tiers, new home prices in August showed a decrease month-on-month and a smaller decrease year-on-year, with only Shanghai among first-tier cities achieving an increase in new home prices both month-on-month and year-on-year. Since the beginning of this year, China's real estate market has been moving towards stabilizing after a decline, and during this stabilization process, housing prices may still experience slight fluctuations. It is hoped that the real estate market will further stabilize under the influence of policies.

Key points from Kaiyuan Securities are as follows:

New homes in Shanghai continue to lead, year-on-year decline in second-hand home prices narrows

The National Bureau of Statistics released the changes in sales prices of commercial residential properties in 70 large and medium-sized cities in August 2025. From the month-on-month perspective of newly built commercial residential properties, first, second, and third-tier cities saw changes of -0.1%, -0.3%, and -0.4% respectively (compared to -0.2%, -0.4%, and -0.3% in July), with an overall month-on-month decline of -0.3% in the 70 cities, remaining stable compared to July. Year-on-year, first, second, and third-tier cities experienced declines of -0.9%, -2.4%, and -3.7% respectively (compared to -1.1%, -2.8%, and -4.2% in July), with the overall year-on-year decline in new home prices in the 70 cities narrowing by 0.4 percentage points to 3.0%. In terms of the number of cities with rising, stable, and falling new home prices in the 70 cities in August 2025, there were 9, 4, and 57 cities respectively (compared to 6, 4, and 60 in July), and year-on-year, there were 5, 0, and 65 cities respectively (compared to 5, 0, and 65 in July).

Year-on-year decline in second-hand home prices narrows, month-on-month decline expands

From the month-on-month perspective of second-hand residential prices, in August, the second-hand home prices in 70 cities decreased by -0.6%, with the decline expanding by 0.1 percentage points. Among them, first, second, and third-tier cities saw changes of -1.0%, -0.6%, and -0.5% respectively (compared to -1.0%, -0.5%, and -0.5% in July). Year-on-year, the second-hand home prices in 70 cities decreased by -5.5%, with the decline narrowing by 0.4 percentage points. Among them, first, second, and third-tier cities experienced year-on-year declines of -3.5%, -5.2%, and -6.0% respectively (compared to -3.4%, -5.6%, and -6.4% in July), with the declines expanding by 0.1 percentage points, narrowing by 0.4 percentage points, and narrowing by 0.4 percentage points respectively. In August 2025, the number of cities with rising, stable, and falling second-hand home prices was 1, 0, and 69 respectively (compared to 1, 1, and 68 in July), and year-on-year, the number of cities with rising, stable, and falling prices was 0, 0, and 70 respectively (compared to 0, 0, and 70 in July). The second-hand home prices in the 70 cities have been declining year-on-year since the beginning of 2024.

New homes in Shanghai lead both month-on-month and year-on-year, second-hand home prices in 35 cities decline year-on-year

From the performance of the key 35 cities in the first and second tiers, in August 2025, new home prices showed a decrease both month-on-month and year-on-year, with 7 cities including Shanghai and Hangzhou achieving month-on-month increases, and 5 cities including Shanghai and Hangzhou achieving year-on-year increases, with Shanghai leading the 35 cities with a month-on-month increase of +0.4% and a year-on-year increase of +5.9%. Among first-tier cities, only Shanghai achieved an increase in new home prices both month-on-month and year-on-year In terms of the overall year-on-year situation of new houses from January to August, Shanghai and Taiyuan led the 35 cities with year-on-year increases of +5.8% and +1.1%, respectively.

Investment Suggestions

In August 2025, the month-on-month decline in new home sales prices in 70 cities remained stable, while the year-on-year decline narrowed, with first-tier cities experiencing a reduced decline in new home prices; in the second-hand housing market, the month-on-month decline in sales prices expanded, while the year-on-year decline narrowed. Since the beginning of this year, China's real estate market has been moving towards stabilizing after a decline. During this stabilization process, housing prices may still experience slight fluctuations. We look forward to further stabilization in the real estate market under the influence of policies. With more proactive fiscal policies and moderately loose monetary policies, the work of stockpiling and urban village renovation is expected to accelerate, improving the existing housing supply-demand relationship and speeding up the stabilization process.

Recommended Targets

(1) Strong credit real estate companies with good fundamentals in layout cities and adept at capturing the needs of improvement-type customers: Greentown China (03900), Cmsk (001979.SZ), China Overseas Land & Investment (00688), C&D INC. (600153.SH), Binjiang Group (002244.SZ), C&D International Group (01908).

(2) Dual-driven residential and commercial real estate, benefiting from both real estate recovery and consumption promotion policies: CHINA RES LAND (01109), New World Development (601155.SH), Longfor Group (00960).

(3) High-quality property management targets with outstanding service quality under the "Good House, Good Service" policy: China Resources Vientiane Life (01209), GREENTOWN SER (02869), Poly Property (06049), CMPO (001914.SZ), Binjiang Service (03669), C&D Property (02156).

Risk Warning

Industry sales recovery may fall short of expectations, and policy relaxation may not meet expectations