建筑行业下滑：新建减少，存量降低

China Real Estate c20% in 2023-25, driven by a decline in construction area Head of Asia Real Estate and HK Equity ResearchThe Hongkong and Shanghai Banking Corporation Limitedmichellekwok@hsbc.com.hk+85229966918Oliver Yu* +ldle landacquisition is settopickuppace,reinforcing afasterdecline inlong-term stock Analyst, Asia RealEstateThe Hongkong and Shanghai Banking Corporation Limitedoliver.y.o.x.yu@hsbc.com.hk+85222882050StephenWang*,CFA +Anewsupply-demandbalanceisformingquickly;westayconstructive-prefer CRL and C&D, both rated Buy Analyst, Asia Real EstateThe Hongkong and Shanghai Banking Corporation Limitedstephen.wang@hsbc.com.hk+8522284 1675 Investorsaresplitonwhethertherecentrallyisdrivenbymoodorfundamentals.Webelieve it is the latter (Still early in the rally, 7 May 2026). We see fundamentals doingthe heavy lifting. Beyond resilient near-term sales, a tightening supply pipeline shouldhelp extend the recovery.Shenzhen's fast-declining inventories are already improvingsell-through for premium projects (Pulse check on supply squeeze, 23 April 2026)This report looks at national inventory trends to confirm the broader picture.Absolute inventory is shrinking, even if turnover metrics lag. While headline not registered/qualified pursuant to FINRA regulations inventory turnover has not improved materially,we estimate total “broad inventory"(across categories) declined c19% over 2023-25 (The path from oversupply toundersupply, 17 May 2024). The key driver is that sold area has consistentlyyet approved for sale.Remaining inventory is increasingly skewed towardscompletedunits andprojects yettocommence construction.We still expecta2026einflection,withpricestabilisationandbettersales inkeycities. Completed homes remain a near-term focus, but the pipeline is gradually thinning.Over the past year,19 cities recorded inventory declines of 10%-plus, while 80 cities sawa milder c3% drop. Completed homes for sale rose in 2025, highlighting ongoingclearance needs.However,with less construction converting into completions,completed-for-sale inventory should fall meaningfully. Developers typically expect 2-3yearstoclearolderstock. Idle land buybacks could reduce inventory by a further5-10%.In 1Q26, localgovernments issued RMB48bn of special bonds foridle land purchases (+56% y-0-y),withscopetoaccelerate.Chongqing'sprogrammeissizeable(c16%of2019-24landsold). If more cities lift targets towards 10% (versus a c5.5% average), broad inventorymay fall another 5-10%.Plan revisions can also cut GFA (e.g., a Shenzhen parcelrepurchasedfromShimaoand subsequently resold toCRLsawGFAcutby35%) Equity implications. The squeeze is most visible in high-quality supply in top-tiercities,albeit gradual rebuilding.Against this backdrop, we favour developers withstronger premium pipelines. We prefer CRL (Buy) and C&D (Buy), with improvedvisibility for an earnings recovery from 2027e. HSBCFundingtheFutureSurvey Sentiment, Al and Private Credit Click to view Issuer of report: The Hongkong and ShanghaiBanking Corporation Limited Disclosures &Disclaimer This report must be read with the disclosures and the analyst certifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Investment Research at:https://www.research.hsbc.com undersupply, 17 May 2024), it is encouraging to see it materialising - though not withoutdisappointments. Inventories are falling across the board, and we expect narrow inventory tosome governments,such as in Chongqing and Guangdong,have announced plans tobuysignificant amounts of idle land (Figure 5), but more governments are lagging. We estimate ifother cities lift their buyback targets to 10% of land sold in 2019-24 (current national average:5.5%), the broad inventory will be cut by another 5-10%. We expected national inventory turnover to improve; instead, turnover has moved the other way.The maindrag is the secondary (resale)market:price-sensitivebuyers areoptingforcheaper resaleunits,whileprimarymarket launches are increasinglygearedtowards upgraders.This mix shift weighs on new home sales, but we see a constructive angle - stronger resaleliquidity gives buyers clearerexit options and helps stabilisepriceexpectations (From'exit'to'upgrade'- why resale liguidity matters, 24 Mar 2026). We expect turnover to improve onceconfidence returns to a larger scale and the marketmoves back towards a more natural equilibrium. Disclosure appendix The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orviews orforecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect Equities:Stoc