Open Source Securities: Real Estate in 2026 Should Focus on Three Main Themes

2026-03-10 01:47:28

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Open Source Securities points out that by 2026, the real estate sector should focus on three main themes: First, valuation recovery at the policy bottom. At the start of the year, policies released by central and first-tier cities signal a clear policy shift, with new construction and land acquisition retreating, indicating an accelerated clearance of supply. Second, focusing on the “good houses” premium quality line. Developers with mature product systems and high-end product lines will enjoy sales premiums and gross profit margin advantages brought by quality differences. Third, drawing on Hong Kong’s “industry—population—rent” transmission pathway, paying attention to the asset allocation demand driven by the recovery of rental yields in core cities.

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[Real Estate & Construction] Adversity as a Hidden Opportunity

The industry bottom is gradually approaching: The first issue of “Qiushi” magazine in 2026 strongly emphasizes “improving and stabilizing real estate market expectations,” signaling a clear policy shift and guidance for industry improvement. In this cycle of decline, the new construction area has retreated more sharply (down 74.1% from its peak) than sales area (down 50.9% from its peak), showing some overshoot in new construction, with supply-side clearance becoming more prominent. From the perspective of rental yield and loan interest rates, currently, the rental yield for second-hand residential properties in core cities is roughly between 1.6% and 2.0%, approaching the ten-year government bond yield.

We believe that by 2026, the real estate sector should focus on three main themes: First, valuation recovery at the policy bottom. At the start of the year, policies from central and first-tier cities signal a clear policy shift, with new construction and land acquisition retreating, indicating an accelerated supply clearance. Second, focusing on the “good houses” premium quality line. Developers with mature product systems and high-end product lines will enjoy sales premiums and gross profit margin advantages brought by quality differences. Third, drawing on Hong Kong’s “industry—population—rent” transmission pathway, paying attention to the asset allocation demand driven by the recovery of rental yields in core cities.

Risk Warning: Macroeconomic downturn, real estate companies’ financing progress below expectations, increased industry competition.

(Source: Yicai)

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