For service providers, we are working hard to create a more harmonious ecosystem. We are moving from a strong focus on the profitability to providing more targeted support. This change aims to have less efficient stores start making deals and ensure higher productivity, store received a better return. We will foster the collaboration and share management with the store owners, improving the operational environment for stores and also increasing their satisfaction with our platform. And also for our self-owned business, Lianjia in terms of the store strategy, we will respond with a large store model. We’ll also open some small stores in the key areas to increase our service coverage and ensure our penetration in this hotspots. In addition, for our Lianjia strategy, we have launched Old Soldier Plan to bring back the former agents, and are opening up to recruiting for the experienced agent from the industry to strengthen our Lianjia team.
In 2024, we will focus on improving agent expertise through the team and talent nurturing, building a talent pool for our One Body, Three Wings business strategy.
Operator: Your next question comes from Griffin Chan with Citi.
Griffin Chan: Thanks management for the opportunity. Congratulations, first, on the solid 2023 results and improving shareholders’ return. So my question is that, how do you view the overall real estate market in 2023? How did the market perform recently? With a notable outperformance of the existing housing market compared to the new home market, how does the management think of the underlying reasons? And how is the churn expected for the new and existing housing market in 2024? Will they continue to differentiate?
Tao Xu: Regarding the market situation in 2023, there was a lot of turbulence in diverse markets. And overall, it is still in the middle of the deep adjustment. Tariffs virtually be observed. The market is shifting towards existing homes at a faster pace. Full-year existing home GTV nationwide rose by around 20-30% year-over-year. Official data showed that new homes accounted for nearly 40% of the full year real estate transaction volume. This is historical high. The new home market recovery fell short. According to official data, national new home sales declined by 6% year-over-year, while for the new home sales of the Top 100 Real Estate developers dropped by 18% year-over-year. New home sales saw some mild recovery in the first quarter of last year, but then it dropped again, and has been hovering there at a very low level ever since.
Housing price continue to adjust. Fourth tier cities home prices saw a faster decline in fourth quarter last year. But overall, fourth tier cities, we see home prices was still higher than the year of 2019. New home prices are stable on hold, primarily due to the structural shift towards high-tier cities. The market supply and demand continue to evolve, leading to what we observe the polarization of the market. For demand side, demand structure keeps changing. Demand for the home upgrade becomes dominant, making up 60% of total housing demand with first-time home buying demand at 30%, and investment demand narrowing to around 10%. Consumers are more inclined to purchase these new homes. Our survey showed customer preference for its new home purchase grew from 23% in June 2022 to 35% in December 2023, while interest in new homes dropped from 31% to 18% over the same time period.
Basically, existing home are meeting already first home buying demand and the people who want to upgrade their homes by selling 1 property to buy other also enter into the existing home market first. For new homes, there’s a lack of demand due to the location and project issue as well as presale model and the product design, we’re starting to align with the current consumers’ needs. Nevertheless, buyers are still interested in the properties located in scarce areas towards good designs. The demand for large size and the higher price, the new home are more stable. Overall, the demand is resilient, but it didn’t translate into the transaction. There is still a wait and see momentum among homebuyers. In 2023, the total number of clients viewing the properties exceeded the total number of newly listed properties on bigger platform, indicating there is the number of people looking to buy homes.
In cities where there’s a solid foundation, such as Shenzhen and Hangzhou, we offer the situation where there was a solid home purchase demand. But consumers are hesitating to enter into the market because the market with abundant home listings or down trending prices, there is need for them to restore confidence among homebuyers. Overall, in fourth quarter, home prices were lowered while people were still willing to make a transaction, indicating the resilience of the demand. Regarding the supply side, we noticed the investors are paying attention to the number of existing home listings, concerned about the high inventory. The number of existing home listing did reach an all-time high in 2023. It is a natural result of the growth of the existing home market.
It also reflects the accelerated release home-upgrade demand under policy encouragement. In first-tier cities, more than 70% of sellers were also the buyer. An increase in home listing is typically the early sign of the growth in demand. In addition, not all home listings are the real supply. Some home owners with their homes, therefore, give it a try manner. Moreover, a portion of the old housing stock remains listed through the year with very low liquidity, leading to a continued increase in the total volume of listing profitability. For new homes, there are still a mismatch between the supply and demand. New homes, with their prices, lower than the neighboring existing homes in the core area of the top cities are still favored and contribute to the mobility of the sales.
