This is not a problem that can be solved simply by adding more property listings. It requires a market mechanism capable of organizing scattered supply and demand, professional service providers, and the transaction process.

Where do the challenges of revitalizing existing homes lie?

The difficulty of second-hand home transactions stems from their "non-standardized" nature. New homes are uniformly priced and centrally supplied by developers, whereas second-hand homes are listed in a scattered manner by millions of individual owners, each setting their own price, with every unit differing in floor level, orientation, age, decoration, and property rights, and every buyer differing in budget, commute needs, and school district requirements. For a city, there may simultaneously exist a large total housing stock and insufficient effective supply in specific areas. As early as 2017, Zuo Hui, founder of BEKE-W (02423), and co-founder Peng Yongdong predicted the arrival of the era of existing homes. They believed that to improve the circulation efficiency of existing homes, the first priority is to increase effective supply, with revitalizing existing stock being the most important means; second, to improve the transaction system so that transactions can be conducted conveniently, efficiently, and safely; third, to accelerate information sharing to reduce information acquisition costs and resource waste caused by information asymmetry; and finally, to promote the professionalization of brokers, since the effective circulation of second-hand homes cannot be achieved without the participation of a professionalized and specialized broker workforce. These judgments remain equally applicable today. From the perspective of the transaction process, the long transaction cycle for second-hand homes is mainly related to property listing verification, buyer-seller matching, price negotiation, and replacement linkages. A scattered market inherently has low matching efficiency and requires a large platform for multi-party connections. Whether both buyers and sellers can quickly find suitable counterparts depends on the organizational structure of the real estate brokerage industry. Under the traditional intermediary model, a broker holds both listings and clients simultaneously, and the most rational approach is to lock the transaction in their own hands, even if the client's needs do not perfectly match the property.

Looking at this from an international perspective, the United States has relied primarily on second-hand home transactions since at least the late 1960s; in 1968, existing single-family home sales were already more than three times new home sales. According to statistics from Japan's Ministry of Land, Infrastructure, Transport and Tourism, second-hand homes currently account for most of the housing circulation in major European and American countries, generally between 70% and 90%. These markets have long recognized that scattered property information needs to be connected through large platforms, though their organizational approaches differ. The U.S. MLS relies on shared rules to encourage brokerage firms to share listings and cooperate; Japan's REINS relies on statutory institutional arrangements and designated real estate distribution organizations to facilitate transaction information circulation within the industry; and the UK's Rightmove connects consumers with brokerage firms through a property information portal. KE Holdings Inc.'s ACN system addresses a similar problem. It breaks down a transaction into stages such as listing entry, maintenance, showing, and closing, allowing brokers across different stores and brands to split commissions based on contribution, so that a single property can be recommended to respective clients by brokers across the entire city simultaneously. This set of rules does not require brokers to abandon self-interest but rather changes the algorithm of self-interest: although the commission split ratio is diluted, the increased probability of closing through cooperation is sufficient to compensate, and thus "sharing listings" replaces "hoarding listings."

Has this mechanism truly expanded the matching radius?

Two indicators can be examined. The first is the cross-store transaction ratio. According to an analysis in a Huachuang Securities research report, the cross-store transaction rate on the BEKE-W (02423) platform has long remained at approximately 70%, meaning that most transactions are completed through cooperation between listing-side and client-side brokers from different stores. Under a single-store model, a considerable portion of these transactions would either close more slowly or not happen at all. KE Holdings Inc. also disclosed data in its early years showing that, calculated by average existing home GTV (gross transaction value) per store, BEKE-W's efficiency had reached 1.6 times the industry average. The second is per-person productivity. BEKE-W's second-quarter 2026 financial report showed that platform second-hand home transaction volume grew 25% year-on-year, while the number of Beilian stores and brokers remained basically stable year-on-year, with average second-hand home transaction volume per store growing 26%. The recovery of the real estate market this year was the broader backdrop for transaction growth, but with store and broker numbers unchanged, the significant increase in per-store output indicates that growth was not achieved through network expansion, and improved matching efficiency contributed at least part of it. The value of KE Holdings Inc.'s ACN broker cooperation network is even more evident in its effect on "hard-to-sell" properties. Homes in core locations with mainstream layouts are in demand under any model; what truly depends on a large matching radius are precisely properties in remote suburbs, old buildings, and those with unusual layouts. These properties have inherently few potential buyers, who are scattered across the city. The larger the network and the more participants, the higher the probability that such listings encounter the few suitable buyers.

Reducing price tug-of-war and transaction risk

In second-hand home transactions, price is often the core factor determining whether a property can be sold, and it is also the most time-consuming part of buyer-seller negotiations. In the current market environment, the price game between buyers and sellers is even more pronounced. Buyers fear overpaying, while owners fear selling too cheaply. Both sides typically relay messages back and forth through brokers to probe the bottom price, with neither willing to reveal their bottom line first. Since the beginning of this year, BEKE-W (02423) has piloted products such as Anzhu, Chengyimai, and Community Open Day in Beijing, Shanghai, and Chongqing. In the past, owners learned about market conditions mainly through broker relay, and were prone to doubt brokers' price adjustment suggestions. The Anzhu App is a transaction assistance tool for owners, launched in Shanghai in early August. Owners can view listing sales progress in real time and the market performance of similar properties, which helps them judge the reasonableness of their home's price, and can proactively send viewing invitations to potential clients recommended by the system. In the first three weeks after the tool's launch, tens of thousands of owners had used it, with 19 transactions completed, and an average transaction time of 7 days. Chengyimai targets the problem of buyers and sellers repeatedly probing bottom prices. Owners set a psychological bottom price, a negotiable price, and a starting price within the KE Holdings Inc. App, with the psychological bottom price and negotiable price visible only to the owner; both buyer and seller each pay a deposit of 50,000 yuan, and the buyer places bids online within a specified time period, with a maximum of two bids, and the system compares them in real time, automatically closing the deal when a bid reaches the psychological bottom price; if no deal is reached, both parties' deposits are fully refunded via the original payment channel. Peng Yongdong said at the first-quarter earnings conference in May: "This time, through 'Chengyimai,' we compressed all intentions into a clear and concentrated window period." Beijing was the first pilot city for Chengyimai. As of August 19, a total of 268 listings had been launched in Beijing, with over 100 transactions completed. Among the properties sold, more than half had been listed for over 90 days previously, with an average listing period of 119 days; for half of the properties, it took an average of only 8 days from deposit payment to signing the sales contract, and after reaching a price agreement online, offline contract signing typically took less than two hours. Community Open Day, meanwhile, targets the buyer side, taking a further step forward in saving their time and helping them measure prices. Viewing several homes in the same community together makes it easier to compare floor levels, orientations, and total prices, and also allows buyers to more concretely visualize their needs. Taking Beijing Lianjia as an example, this activity began piloting at the end of March and, as of late July, had been implemented in 67 communities, changing scattered one-on-one showings into centralized viewings for multiple client groups, making it easier for buyers to make horizontal comparisons within the same community. Data shows that communities holding Open Days saw an average 2.6-fold increase in same-day viewings, and buyers who participated in Open Day viewings had a signing rate within 7 days approximately twice that of non-participants.

After the price is settled, the transaction still needs to pass the tests of funds and property rights. In the existing-home era, upgrade demand is mainstream, and "selling old to buy new" and "selling small to buy large" are the main paths for home swapping. However, the longer the replacement chain, the greater the risk of transaction interruption. For example, unclear mortgage conditions on the seller's side may cause the transaction to stall at the final moment, a property may be found to be seized after signing, or large outstanding property management fees may be discovered at handover. To address the uncertainty of such hidden transaction costs, in 2025 BEKE-W (02423) launched the "True Guarantee" full-process service protection system, under which the platform advances payment after a risk occurs and then seeks recovery from the responsible party. According to KE Holdings Inc.'s disclosure, over the past 20-plus years, the platform has cumulatively refunded and advanced more than 6 billion yuan to bear risks and losses for buyers and sellers. In the transaction process, to further safeguard the property transaction security of both buyers and sellers from a third-party professional perspective, BEKE-W has established hundreds of signing centers across numerous cities nationwide. Through heavy investment in offline service scenarios, it has built the most important standardized professional services in the transaction process. Risks in transactions are excluded at the signing site. At the same time, it has also begun rolling out "one-stop online post-transaction services" in various cities, directly connecting core steps such as online signing, in-person signing, transfer of ownership, and mortgage with multiple banks, moving the originally cumbersome and time-consuming offline processes online, allowing data to run more and people to make fewer trips.

From organizing transactions to providing residential advisory services

The connection between home selection and renovation is most urgent for old homes. Some old homes have suitable locations and total prices within budget, yet because of their appearance, they fail to inspire buyers' expectations and imagination of home, and are thus not chosen. Today, as participants in revitalizing existing stock, brokers connect no longer just a single transaction, but an entire set of residential services. In Beijing Dahongmen, a young person and their parents liked two homes: one was a newer two-bedroom unit, and the other was an older three-bedroom unit with a lower total price. What the family hesitated over was the 6-square-meter small room in the older three-bedroom unit. The young person wanted to use it for gaming, while the parents were considering where they would sleep at night when they came to help take care of a child in the future. A Beijing Lianjia broker invited an in-store home decoration designer, who proposed a custom desk and a double sofa placed against the wall that could be pulled out into a bed. Both generations' needs were accommodated, and the older three-bedroom unit was ultimately chosen. This is the "Residential Advisor" project piloted by Beijing Lianjia in Dahongmen. It has brokers familiar with the community sort out the issues buyers care about most, and then work with designers to study renovation solutions, forming an initial 13 sets of plans, allowing buyers to intuitively experience "new home" renderings and resolving their home decoration design concerns during the home-buying process in advance. According to Beijing Lianjia's disclosure, by mid-October this year, this pilot had covered 139 layouts in 82 communities in Beijing. Moving renovation planning that was previously considered after handover forward to the home selection stage, thereby making consumers' imagination of home more concrete, this approach can be replicated to more old existing homes, as older public housing in the same area often shares a batch of standard layouts. This also places new demands on brokers. In 2019, at the Boao Forum for Asia, Peng Yongdong judged that "in the future, services around housing will be as important as the housing itself, and the rise of service provider value will increasingly become one of the most important forces driving the entire industry." When BEKE-W (02423) launched its strategic transformation in March this year, Peng Yongdong said: in the future, brokers will increasingly move from "information intermediaries" to "trust-based service providers," gaining clients' long-term trust by whether they can understand clients, explain complex issues, organize multi-party collaboration, and provide professional advice.

Revitalizing existing stock requires joint efforts from multiple parties

In fact, even in mature markets, revitalizing existing stock is not easy. The liquidity of second-hand homes in the United States is heavily influenced by interest rates. Research estimates from the U.S. Federal Housing Finance Agency suggest that from the second quarter of 2022 to the second quarter of 2024, the "lock-in effect" brought by low-interest mortgages reduced U.S. transactions by about 1.72 million, and in 2025 existing home sales fell to the lowest level since 1995. Japan's challenge is that old homes do not circulate and a large number remain vacant. In 2023, Japan had about 9 million vacant homes, with a vacancy rate of 13.8%. Japan's revitalization of existing stock works from both institutional and market sides. On one hand, through home inspections, maintenance records, and renovation information, buyers can understand the actual condition of homes more clearly; since 2018, Japan has required intermediaries to explain the results of home condition surveys to buyers before signing, and "Anshin R Housing" also requires unrenovated homes to be accompanied by a renovation proposal with cost estimates. On the other hand, it supports companies in acquiring old homes, renovating them, and reselling them, bringing housing that originally could not meet demand back into the market; such "buy-and-resell" transactions are growing rapidly, with Yano Research Institute estimating about 62,700 transactions in 2025. These overseas practices show that revitalizing existing housing stock requires information circulation, professional services, and housing renovation to work together. Based on a 2021 comparison of turnover rates between China and the United States, data source: Soochow Securities. From international experience, as the age structure of housing stock ages and demand for upgraded housing grows, the second-hand home turnover rate (the ratio of second-hand home transaction volume to total existing housing stock) will gradually increase. China's second-hand home market started late, and under an active O2O economy, a platform like BEKE-W (02423) emerged. KE Holdings Inc.'s existing listing information, brokerage service network, and rental and home decoration businesses provide a feasible way to organize residential services and bridge service gaps at various points in residents' housing chain. For example, if consumers could see renovation plans at the home selection stage, if replacement arrangements could effectively connect with rental transition, and if owners could clearly see the costs and conditions of different options before disposing of housing, it would be possible to reduce the costs consumers incur in repeatedly searching, communicating, and deciding among multiple service providers. The listing information system, professional service network, cross-party collaboration mechanism, and digital capabilities that BEKE-W (02423) and Lianjia have accumulated around housing transactions over the past 25 years provide a foundation for revitalizing existing resources. Now, revitalizing existing stock must move from "having a place to live" to "living well," which itself is about releasing upgrade demand and expanding residential consumption.

Of course, it must also be recognized that some homes cannot be sold. For homes that are too old, lack elevators, or lack supporting facilities, even with fully transparent information, it is very difficult to find buyers, and if no one takes them over for a long time, they may become vacant like in Japan. Solving such existing-stock problems requires urban renewal and renovation of existing housing. Wu Jing, director of the Real Estate Research Center at Tsinghua University, once pointed out that real estate's contribution to the economy will be "more reflected in improving the quality and efficiency of existing stock," and that urban renewal, renovation of existing housing, and rental operations will provide new space for enterprises. These tasks require the government and more market participants to participate and complete together. From this perspective, residential service-related businesses such as decoration, leasing, property management, maintenance, housekeeping, and renovation and upgrading are important directions for real estate transformation, expanding service consumption, and absorbing employment in the existing-home era, and industrial cultivation and policy support should be further strengthened.