People still prefer buying new homes. However, a situation has emerged where prices of the new home are significantly higher than those of existing homes. This creates a large price gap that handles new home upgrades or reduce developers motivation to increase inventory and offer promotions. There are also cities where demand for new homes has considerably improved this year, such as Shenzhen. The weekly subscription volume of the new homes in Shenzhen reached a record high by end of September. However, a considerable proportion of this recently increased demand has already been met through the talent housing supply. In response to the market changes, most big national and local developers are expected to really step up their sales gain by the end of the year with more promotions.
Along with policy support, on the other hand, some smaller local developers are taking easy. Starting in early September, following current policies, some developers have taken the initiatives to start promoting their projects, but we don’t expect them to primarily rely on the significant price reductions. In terms of the developers working with the brokerage services, the penetration rate for brokerage market to the new home market has been on the rise this year. For instance, in Q3, the penetration rate of broker service in Shenzhen increased by 6% compared to the same period of last year, while Chengdu witnessed a growth of 10% to 15% year-over-year. Although developer sentiment may fluctuate due to the market change, a relatively stable and balanced cooperative relationship has been established.
From Beike’s perspective, our goal is to establish a mutually beneficial partnership with developers where we can cooperatively create additional value for customers. The low satisfaction level among customers regarding the new home product is one of the main reasons why market likes momentum. By gaining deeper insight into the customer preference through interactive data analysis and extensive research, we can develop better products that cater to the new home housing upgrade needs, while also enhancing the overall experience. Recent projects like Chengdu one of the riverside, Wuhan Tiandi and Beijing One Sino Park demonstrate the high quality of new home products still generate significant demand in today’s market. This divergence indicates a clear direction for future development in the new home market.
Additionally, if 1.0 flow area to land area ratio restriction is to be removed for largely populated area, it can really help boost the development of high quality, low density residential property in future housing market. This will stimulate the improvement in demand and enable residents to experience a leap forward in their future housing experience. Going forward, as we consolidate and deepen our fundamental work in core areas such as commissioning the bonds, cooperation with state-owned developers, and focused sales strategy, we will prioritize enhancing our new home market coverage and sell through to withstand potential market downturn risks. Our strategy will primarily cover the following. Number one, building new partnership with developers.
As developers move from local autonomy to centralized management, we will work closely with them at every level to establish deep and meaningful collaborations. Number two, we will tailor our strategy and policies to individual cities. Number three, refund operation management. We will beat up our infrastructure starting with our housing dictionary, ecosystem, standardized process and building the skill to make the products that the customer will love. Thank you.
Operator: Thank you. Your next question comes from Miranda Zhuang with Bank of America Securities. Please go ahead.
Miranda Zhuang: [Foreign Language] Thank you. So my question is like historically we have seen M&A was used to grow companies, home brokerage business and company recently also announced a proposal to acquire Kongjian Zhihui to further grow the home furnishing business. So can management share your thoughts about the importance of M&A versus organic growth in your growth strategy and also your thoughts about the future investment and the pace of it? Thank you.
Stanley Peng: Okay. I’m Stanley. Thank you for question. So generating sustainable internal innovation and organic growth is definitely a long-term goal for us. In the process of achieving the long-term goal, we have some phased strategy opportunities that we need to achieve to revolutionize the home innovation and the furnishing industry. We need to have ample scale and business density in a single city. This allows us to experiment, refine, and enhance our competencies promptly. Acquisitions are the most suitable route to achieve this short-term strategic opportunity. Hence, our emphasize on acquisitions isn’t merely for immediately revenue or financial growth. But to attend a necessary scale and a density as a fertile piece of land to force the industry innovation.
