KE Holdings Inc. (Beike), a leading real estate services company, has reported significant growth in the third quarter of 2024, with its total Gross Transaction (JO:TCPJ) Value (GTV) increasing by 12.5% year-over-year to RMB736.8 billion. The company's net revenue also saw a substantial rise of 26.8%, reaching RMB22.6 billion. This performance comes despite a challenging real estate market, showcasing the company's resilience and the positive impact of government policies aimed at market stabilization.
Key Takeaways
- KE Holdings' GTV and net revenue showed double-digit growth in Q3 2024.
- Existing home transactions and new home transactions both increased, with the latter seeing an 18.4% rise in GTV.
- Revenue from home renovation and furnishing, as well as home rental services, experienced significant year-over-year growth.
- The company benefited from government measures that led to a real estate market recovery, especially in Tier 1 cities.
- A small leadership committee was established to improve governance, and the company expanded its store network and agent count.
- KE Holdings remains focused on long-term growth and operational efficiency.
Company Outlook
- KE Holdings is cautiously optimistic about the future, aiming for long-term growth and value creation for stakeholders.
- The company plans to leverage innovative services and strategic collaborations to support the ongoing recovery of the real estate market.
Bearish Highlights
- No bearish highlights were mentioned in the summary provided.
Bullish Highlights
- The company's strategic focus on enhancing governance and expanding its network has contributed to its strong performance.
- The home rental services segment has managed over 360,000 units with a 52% lease renewal rate, indicating a robust and growing business line.
Misses
- The summary provided does not include any specific misses or underperformances.
Q&A highlights
- CEO Stanley Peng expressed confidence in the company's long-term prosperity.
- CFO Tao Xu emphasized the importance of focusing on operational essence to support business growth.
- The company anticipates the real estate market to remain relatively stable in Q4.
Financial Highlights
- KE Holdings reported a GAAP net income of RMB1.2 billion and a non-GAAP net income of RMB1.8 billion.
- The company has a robust cash liquidity position with RMB76.3 billion on hand.
- A share repurchase program is ongoing, with approximately $584 million in shares bought back.
KE Holdings' strong Q3 performance is a testament to its strategic initiatives and the favorable market conditions fostered by government policies. The company's focus on governance, store expansion, and agent recruitment, alongside its innovative service offerings, positions it well for continued success in the evolving real estate landscape. With a stable outlook for Q4 and a commitment to operational efficiency, KE Holdings is poised to build on its recent achievements and strengthen its market presence.
Full transcript - Ke Holdings Inc (BEKE) Q3 2024:
Conference Operator: Hello, ladies and gentlemen. Thank you for standing by for KE Holdings, Inc. 3rd Quarter 2024 Earnings Conference Call. Please note that today's call, including the management's prepared remarks and question and answer session, will all be in English. Simultaneous interpretation in Chinese is available on a separate line for the duration of the call.
To access the call in Chinese, you will need to dial into the Chinese language line. At this time, all participants are in listen only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Siting Li, IR Director of the company.
Please go ahead, Siting.
Siting Li, IR Director, KE Holdings (Beike): Thank you, operator. Good evening and good morning, everyone. Welcome to Kei Holdings OR Baker's Q3 2024 Earnings Conference Call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR Web site, investors. Kei.com.
On today's call, we have Mr. Stanley Peng, our Co Founder, Chairman and Chief Executive Officer and Mr. Tao Xu, our Executive Director and Chief Financial Officer. Mr. Peng will provide an overview of our strategies and business developments, and Mr.
Xu will provide additional details on the company's financial results. Before we continue, I refer you to our Safe Harbor statement in our earnings press release, which applies to this call as well as we will make forward looking statements. Please also note that Aker's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non GAAP financial measures. Please refer to the company's press release, which contains a reconciliation of the unaudited non GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in RMB.
Certain statistical and other information relating to the industry in which the company is engaged to be mentioned in this call has been obtained from various publicly available official or unofficial resources. Neither the company nor any of its representatives have independently verified such data, which may involve a number of assumptions and limitations, and you are cautioned not to give undue way to such information and estimation. For today's call, management will use English as the main language. Please note that the Chinese translation is for convenience purpose only. In case of any discrepancy, management's statements in their original language will prevail.
With that, I will now turn the call over to our Chairman and CEO, Mr. Stanley Tan. Please go ahead, Stanley.
Stanley Peng, Co-Founder, Chairman and CEO, KE Holdings (Beike): Thank you, Xin. Hello, everyone. Thank you for joining Baek's Q3 2024 earnings conference call. In the Q3, we continued demonstrating our dynamic and sustainable growth momentum. Despite challenges in the market, each of our business segments delivered solid results.
DTV for our existing home transaction business reached RMB477.8 1,000,000,000 in the Q3, up 8.8% year over year. According to the estimate from data disclosed by the housing bureaus and housing associations of the 1st tier cities, the total number of online registered transactions for existing home grew by about 21% year over year in the Q3, while the number on big platform saw by 44% year over year for reference. For new home transactions, GTV on Baker platform increased by impressive 18% to RMB227.6 billion in the 3rd quarter, while new home transaction GTV or CLIC 1200 developer declined 29% year over year. In the Q3, our home renovation and furnishing and home rental services revenue grew year over year by around 33% 118%, respectively. At the end of Q3, a noticeable shift in policy also posted a solid market rebound.
In this market cycle, one thing we have become increasingly certain about is the importance of thinking long term. We are going to be deeply understanding the power of our long term prosperity For our organization, survival and development are our core imperatives. Among this, our foremost priority is to survive, enduring and surviving. Therefore, our focus is not just on how to navigate next year, but on how to become a company that can survive for 30, 40 or even 100 years. The greatest threat to our company's longevity, our rigidity, bureaucracy and loss of vitality to grow and innovate, To treat us, a company needs 2 things.
The first is integrity, doing the right things and creating value for society. And second, creativity. Every step we take today is guided by these principles, doing the right things even if it's difficult and fostering creativity. This is how we'll become a company. They stand the test of time.
Let me share how we are putting this vision into action. For any large organization, the biggest rate is lack of growth. The proactive business growth strategy we put in place this year has yielded remarkable results.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): In terms of scale, by the
Stanley Peng, Co-Founder, Chairman and CEO, KE Holdings (Beike): end of Q3, we have increased number of active stores on our platform by 14.6 percent year over year with a net addition of almost 6,000 stores compared with the same period last year. We now have more than 40 6,800 active stores. The number of active agents also grew to over 420,000, which means we added 24,000 agents since the Q3 of last year. Our strategic collaborations in the new home markets grew than all top tier developers. In August, the number of transactions from our strategic project developers accounted for 26% of our total new home transactions.
We also made strides in improving store and platform operating efficiencies. In the Q3, the average revenue per store on our platform, excluding Beijing and Shanghai, surpassed levels from the same period in previous years. The support ratio of platform staff to frontline agents auto reach a record high. We also maintain robust risk control and strive for higher service quality. The right mechanisms are also crucial for fostering organizational creativity.
In the Q3, we officially established a small leadership committee as an innovative state toward rethinking large organizations' governance. It's a governance system that ensures forward thinking and our long term outlook. After a year of trail implementation, the committee is now officially in place. It consists of the leaders of our main business lines as well as the heads of our finance and HR departments, Xu Yuan Gao, Li Feng Yan, Wang Yongqing, Xu Tao and Zodong Huang. The committee will report directly to me and is tasked with carefully considering and planning the company's key strategies and initiatives.
Its goal is to ensure collaborative leadership, clear accountability and continuous self reflection. By design, this model brings together diverse perspectives to help us make better decisions and strengthen our unity as a team. In the future, we will continue to refine and promote the innovation of our company's governance mechanism to further strengthen our leadership framework. In addition, we are officially appointed the CEOs of our new initiative businesses. Xu Wang Gang, who had already been serving as the CEO, Beiho Jiang, will now also lead our home renovation and furnishing business.
Wang Yongqi will head for our new for our home rental services business and also continue in his role as a COO of Lianzhi. They will both report it to me. These appointments reflect our commitment to tackling future changes and our focus on aligning resources to achieve greater synergies across the group. The development over the past few years, our home renovation and furnishing and home rental services business have achieved several key milestones. In the 1st 3 quarters of this year alone, revenues from our home renovation and furnishing business surpassed RMB10 1,000,000,000 across more than 45,000 projects.
Revenue from our home rental services business approached RMB10 1,000,000,000 during the 1st 3 quarters, with the number of rental units managed under carefree value exceeding
Tao Xu, Executive Director and CFO, KE Holdings (Beike): 360,000.
Stanley Peng, Co-Founder, Chairman and CEO, KE Holdings (Beike): I'm truly grateful to our excellent team for fostering these achievements. That said, we have more work to do. There are still many fundamental unresolved problems in the industry. We will iterate our scientific management and other capabilities to address the industry underlying issues related to quality and commitment among others. We hope that when people talk about this industry and our brand in a few years, they will say, your quality is exceptional.
Today, we are at our pivotal moment in this undertaking. Over the next 2 years, we will strengthen our core capability to reach our vision. For our platform ecosystem, we are more committed than ever to working with store owners and store managers. They are the high frequency players in this low frequency industry. Our top priority is helping them achieve better returns.
If they adopt a long term mindset, our platform can achieve lasting growth. In the Q3, we introduced new operational mechanisms to support this goal. We launched our Store Points incentive program that rewards store owners for long term platform loyalty, strong performance, integrity and innovative business practices. These initiatives are to significantly enhance store owners' satisfaction and allegiance to our platform. In Q3, we distributed around RMB18 1,000,000 in cash equivalent incentives to store owners in pilot cities.
Take Shenzhen, one of our pilot cities as example. Over the past 2 to 3 years, more than 1,000 new stores have joined our network in Shenzhen, while growing in scale. These new stores face 3 major challenges, insufficient to emphasize on existing home transactions, slow progress in the new initiatives like home renovation and rentals And we collaboration across the platform with relatively high post transaction customer complaint rates. We tailor specific incentives within the store port system to address these issues and motivate positive change. Stores can now increase 20% after bonus points for completing existing home listing transactions.
They also receive 2 to 3 times bonus points for conducting non housing transaction businesses. Stores are also avoid separate bonus points if they have been in our network for a long time and have a history of compliance and collaboration. Strongers can convert their points into additional benefits. In October, strongeners in Shenzhen received a total RMB2.49 million equivalent incentives and 930,000 basic coins with top single store receiving RMB 210,000 equivalent incentives. Notably, the platform's profit sharing payouts to store owners boosted their income, offsetting the cost of renting a storefront.
At the same time, we effectively address the 3 core problems. Monthly existing home transaction began to recover and increased by 12% sequentially. In September, number of units leased out on the carefree rent grew by 21% in Q3 compared with Q2. And across store existing home transaction reached 74.5% of total transaction on record high. Of course, these metrics only indicate short term achievements.
More importantly, our goal is to use the store membership point system to encourage store owners to think long term, share value with them and provide a clear development path on the platform, driving growth for both stores and the platform. Moving on to brand of Lianjia. We have continued to advance its tech cloud plan this year. Our decision to invest in Lianjia during tough market adjustments is also firmly rooted in our long term vision. First, Lan Jia is the cornerstone of our 1 body stream win strategy.
Maintaining Lan Jia's solid fundamentals is crucial, while we promote its expansion based on sustainable operations and ongoing efficiency. Lan Jia also need to lead the way in innovation and be the front runner in tackling industry changers, reconstructing operational organizational capabilities and advancing agents' professional development. The number of leading just active agents grew by almost 13% year over year, exceeding 110,000 Nianjia agent attrition rate in cities, excluding Beijing and Shanghai, dropped 2 point 4.4% by the end of September, down 0.4 percentage points from 2023. In addition, we also continue to make headway in the large store model with the average number of agents per store across Lianjia nationwide climbing to 19.2. As of September, nearly 3,800 Lianjia manager level employees and above have trained in the Lianjia Large Store Leadership Development Program.
To sustain creativity, we will constantly map out new opportunities and possibilities for the future. We cannot afford to wait until growth slows down to start innovation innovating nor should we fall into complacency or simply defend what we have. Instead, we must plan ahead. We may open to embracing new ideas and investing in long term strategies. That's why we won't make blind base each segment in our industry is substantial.
And entering any new venture requires intensive decision making process. Our approach includes extensive foresaws, pilot trails by dedicated teams and deep engagement. Our thorough understanding is essential before taking any action. We don't rush. That's our underlying rationale for exploring Beihao Jia's business opportunities.
Lastly, we are greatly encouraged by the central government's recent positive statements and a series of coordinated policy measures to support stabilize the property market. Since the end of September, the market reaction has been strong and far reaching. We are now seeing signs of market recovery with regards to both volume and the prices. As we navigate through higher and lowers, we must remain calm at the peaks, stay fast at the truth and grounded in reality in between. This is how we find true stability with the broader environment improving.
The tools we have learned during this period of market adjustment are clear, steering committed to long term maintaining optimism, fostering resilience and the unity. These tools and the bold efforts we made in challenging times will enable us to go even further in a more favorable environment. Thank you. Next (LON:NXT), I would like to turn the call over to our CFO, Jun Tao, to review our Q3 2024 financials.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): Thank you, Stanley, and thank you everyone for joining us. Before we dive into our Q3 performance, I'd like to briefly touch on some updates in the housing market. The market's performance in Q3 was in line with our previous day projections. The market experienced gradually retreated for the following post life rebound fueled by intensive supportive policy release in May. Particularly in September, the year over year decline in market performance widened due to higher base.
In Q3, the existing home market was relatively stable with year over year increase in transaction volume. This was primarily attributable to homebuyers preference for the readily available existing homes. In comparison, the new home market will still in a bottoming out stage with weak supply and demand as it would take time to resolve the real estate developers' debt risk. By end of September, there was an intensive array of the real estate policies from the central and the local authorities. This included a lowering interest rate, reducing mortgage rate for existing homes and aligning the minimum down payment ratio for the first time and the second time homebuyers.
These policies further stimulated the housing demand, encouraging more people to enter the market. Meanwhile, other macro economy policies such as monetary policies indirectly fuels the market confidence, which is stimulated to market activities. We are highly anticipating the market performance after the Q3. Turning to our financial performance in Q3, our total GTV reached RMB736.8 billion, up 12.5% year over year. Net revenue was RMB22.6 billion, representing a year over year increase of 26.8 percent.
Gross margin declined by 4.7 percentage points year over year to 22.7%. GAAP net income reached RMB1.2 billion, showing a year over year decrease of 0.2%. Non GAAP net income reached RMB1.8 billion, reflecting a year over year decrease of 17.5%. Non GAAP net income exceeded market consensus. Moving to our home transaction services.
Revenue from existing home transaction reached RMB6.2 billion, down 1.4% year over year and 15.2 percent quarter over quarter. GTV was RMB477.8 billion, up 8.8% year over year and down 16.3% quarter over quarter. Our GTV and revenue showed a similar sequential declines, keeping our monetization rate relatively stable. Year over year, GTV growth surpassed the revenue, which was mainly due to the higher contribution from the GTV of a single home transaction facilitated by the connected agents. The revenue was recorded on a net basis.
The contribution margin from the single home transaction services reached 41%, a decline of 7.7 percentage point year over year and 6.5 percentage point quarter over quarter. This decrease was primarily due to the increased fixed labor cost related to increased number of agents and the improved welfare of the agent under the retreated market circumstance. In terms of the new home transaction services, although the market remains sluggish, we significantly outperformed the market across all metrics. CRSD shows that the sales from the top 100 developers decreased by around 29% year over year and around 27% sequentially in Q3. In contrast, our new home GTV reached RMB227.6 billion in Q3, up 18.4 percent year over year, while down 3.3 percent quarter over quarter.
This remarkable performance, notably above the industry, was mainly powered by deeper cooperation with developers and our refined operations that strengthened our capabilities. Revenue from new home transaction rose by 30.9% year over year to RMB7.7 billion, but dropped around 2.6% from the previous quarter. Revenue outperformed GPB both year over year and sequentially, once again demonstrating our strong and steady monetization capability in new home transactions. The contribution margin from new home transaction services grew by 0.4 percentage points year over year to 24.8%, largely as a result of a strategic increase in variable commissions due to greater emphasis on building harmonious ecosystem and the better rewards to our agents. Sequentially, the new home contribution margin declined by 0.3 percentage points due to the increase in the fixed labor costs.
In Q3, the commission income percentage from SOE developers rose to 58% and as a proportion of the commission in advance projects maintained a relatively high level at 44%. Revenue from the home renovation and furnishing business, home rental services, emerging and other services grew by 54.3% year over year in Q3, accounting for a portion of our total revenue at 38.3% with a record high and surging by 6.8 percentage points from the same period of 2023. Our home renovation and furniture business maintained a steady growth. In Q3, contracted sales reached RMB4.1 billion, up 24.6 percent year over year. Revenue amounted to RMB4.2 billion, rising by 32.6 percent year over year.
The revenue growth rate outpaced that of the contracted sales, mainly due to higher delivery efficiency. The contribution margin for the home renovation and furniture business reached 31.2%, up 2.1 percentage points year over year and relatively flat sequentially. This was primarily driven by gross margin improvement in our home renovation business. The contract sales of furniture and home furnishing retail, which are outside of our home renovation package, reached approximately RMB1.1 billion in Q3, accounting for approximately 28.1% of the total contract sales, improving by 2.1 percentage points from the same period of 2023. Our home rental services business continued to grow at an accelerated pace.
In Q3, as revenue reached RMB3.9 billion, up 118.4 percent year over year. Benefiting from the rapid growth is number of rental units under the management. Back end of Q3, the number of units managed by our home rental services exceeded 370,000. In particular, the number of the rental units managed under our carefree rent exceeded 360,000 compared with around 160,000 in the same period of last year. Its contribution margin was 4.4%, declined by 1.4 percentage points sequentially.
This was mainly due to the higher commission expenses due to the seasonality. In Q3, our net revenue from emerging and other services decreased by 21.5 percent year over year to RMB487 1,000,000. Next, let's move on our other costs and expenses in Q3. Our store costs and other costs remained generally stable year over year and quarter over quarter at RMB703 1,000,000 and RMB502 1,000,000 respectively. Gross profit rose by 5.2% year over year to RMB5.1 billion.
Gross margin was 22.7%, down 4.7 percentage points year over year and 5.2 percentage points sequentially. The primary reason for the decline was the falling contribution margin of the Yixin home transaction service led by the increased fixed labor costs. In Q3, our GAAP operating expenses were RMB4.4 billion, up 11% year over year and down 2.1% sequentially. G and A expenses were relatively stable year over year at RMB1.9 billion, while falling sequentially by 8.6 percent. This was mainly attributable to the reduction in the share based compensation.
Sales and marketing expenses grew by 18.6% year over year to RMB1.9 billion as we invest in the rapid dysfunction of our home renovation and furniture business, increasing associated sales and marketing expenses. Quarter over quarter, sales and marketing expenses rose by 2.8%, remaining largely stable. Our R and D expenses were RMB573 1,000,000, rising by 1.5% year over year and 13.6% sequentially, primarily due to the increased R and D expense our home transaction services and the higher expenses of exploration for some advanced R and D projects. In terms of the profitability, GAAP income from operations totaled RMB727 1,000,000 in Q3, down 20.2% year over year and 63.9% sequentially. GAAP operating margin was 3.2%, a decrease of 1.9% and 5.4 percentage points from the Q3 2023 and Q2 2024 respectively.
Non GAAP income from operations totaled RMB1.4 billion, declining by 27.7 percent from the same period last year and 51.5 percent quarter over quarter. Non GAAP operating margin reached 6%, down 4.6 percentage points from Q3 2023 and Q2 2024, respectively. The decline in operation margin was mainly due to the lower gross margin. GAAP net income totaled RMB1.2 billion in Q3, showing a year over year decrease of 0.2 percent, while dropping by 38.5 percent quarter over quarter. Non GAAP net income reached RMB1.8 billion, down 17.5% year over year and 33.8% quarter over quarter.
Moving to our cash flow and balance sheet. We realized the net operating cash inflow of RMB449 1,000,000 in Q3. The new home DSO was 47 days in Q3, which is a testament to our effective risk management. On top of approximately $204,000,000 allocated to the share repurchase during Q3, our total cash liquidity remains at a high level of RMB76.3 billion, which excludes customer deposits payable. With our robust cash reserves, we continue to reward our shareholders who have grown with us through the active share buybacks, enhancing capital operation efficiency and sharing the benefits of our development with investors.
At the end of Q3, we had repurchased around $584,000,000 worth of shares this year, which accounted for around 3.3% of company's total share outstanding at the end of 2023. We have consistently delivered on our promise to reward shareholders. Since the launch of our share repurchase program in September 2022, we have repurchased around US1.49 billion dollars worth of shares at the end of Q3, which accounted for around 8.1% of the company's total share outstanding before the program began. As our business become more diverse and is bouncing scale, we have set higher requirements for the reasonable allocation of resources and financial prudence. Our financial strategy is to focus on the essence of the operation and support the growth of our 1 Body 3 wins business by strictly controlling our risk thresholds and maintaining a healthy cash flow.
For our housing transaction services, on the situation of our stores' partnership strategy, we have implemented a comprehensive upgrade of the financial accounting model. Regarding our home renovation and furniture business, while upgrading our centralized purchasing module nationwide, we have further enhanced the level of automation in our business and the financial process. As for our home rental services, with the continuous iteration of our business model and the rapid scale up in the number of the management properties, we continue to come through and update our business and the financial process to facilitate business development. Regardless how external environment changes, we will remain true to our original intentions, facilitating customers' better living, enabling service providers' bright prospects, promoting investors' advancement and building harmonious ecosystem. We believe we will gain huge potential growth in vast markets and advance towards 1 stop residential service platform.
That concludes my prepared remarks for today. Operator, let's open for questions.
Conference Operator: Thank As a reminder, we only accept questions on the English language line. For the benefit of all participants on the call, Your first question comes from John Lam with UBS. Please go ahead.
Stanley Peng, Co-Founder, Chairman and CEO, KE Holdings (Beike): So maybe I translate my question in English. So my question is more regarding on the recent property policy. So how does the management view about this policy versus in the past? And so far, how is the effect from the policy leasing? How is the sustainability?
And also, what kind of market forces is required in order to have a market stabilization? Thank you.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): Thank you, Xiaobin. In Q3, all market performance was muted. As a factor of the May 17th policy stated, coupled with the low summer season, the same home transit to market shows a month by month decline in July, August September. For the new home market, the year over year decline in GTV of CRRC 1200 developers also worsened month by month in Q3, even after seasonal improvements in middle year. However, since the launch of the policy package at the end of September, transaction volume in existing and the new home market surged nationwide.
Tier 1 cities led this job. Meanwhile, with the huge transaction volumes, home prices also showed signs of temporary stabilization. Overall, this round of policies has driven stronger market recovery than last 2 previous rounds on August 31, last year and May 17, this year. For details, this round of the policy exceeded the last two rounds in both scope and intensity. Unlike previous relaxation in either purchase restriction or mortgage condition, This round of policy introduced a whole package of the countercyclical policies directly initiated by the Politburo in response to new issues in the current market economy.
Combined with greater credit support from the central bank and the swift implementation of purchase restriction relaxation in Tier 1 cities that led to the market outperformance. In particular, the political meeting explicitly emphasized the first time to stop decline of the rail market. This work shows the country's commitment to stabilizing the hotel market and that leads to a stronger recovery in market expectation compared to previous 2 rounds. For the same home market, following this round of policies, transaction volume have increased significantly across 1st, 2nd and 3rd tier cities. This contrast with post May 2017 policy response, where the rebound was only in the 4th tier cities.
In October, the number of existing home transaction on our platform marks the highest monthly level, rising by over 17% year over year and 60% from September. Notably, the transaction volume in Q1 cities sold year over year increase is over 100%, with Shenzhen up by over 2 50%. In October, Shenzhen average daily transaction volume reached the highest level in near 4 years. Year over year growth in Beijing and Shanghai was also more than 120%. For Tier 2 and Tier 3 cities, transition volume saw a year over year growth of more than 60%.
Regarding city home prices, a positive signal is that October saw a month by month price stabilization with a slight 0.3% increase, thanks to the surge in transactional volume and the improving market sentiment. This marks a notable improvement from the 2.1% decline in September and is the first increase since the beginning of 2023. Prices in Beijing, Shanghai and Shenzhen were up 2.2%, 2% and 0.7%, respectively, compared with September. This was mainly due to the fewer homeowners rushing to sell at a steep discount. This shift is a reflection in the paper prospecting tax, which tracks the percentage of the price increase in all price adjustments of listed homes on bigger platform.
After hovering below 10 since its rise early this year, the index recently recovered to 14. In Tier 1 cities, it rose to 19, with Shenzhen jumping to 32 to a relatively active range. This shift indicates an incremental increase in the number of homeowners rising their home listing prices. Regarding the transaction structure, the market was primarily led by home upgrades who had purposely been viewing properties, but were in a wait and see mood. According to Baker Research Institute survey, after policy rollout, the proportion of consumer looking to buy a home quickly increased by 5 percentage point.
In Tier 1 cities, this grow from the 17% to 31%. The proportion of the wait and see consumer decreased. Regarding the new home market, the latest round of policies also led to a rebound in the new home market. In October, the GTV of CRRC 1200 development increased by 73% from September and 7% from the same time last year. New home subscriptions on our bigger platform during National Day holiday nearly matched the subscription level for the entire month of September.
New Home experienced a greater month by month rebound in Sing Homes. One reason is the lower base in September. The other reason is that the new policies mitigates the consumers' concern about the home delivery issues and developers' active promotions during the National Day holiday also helped boost the new policy effectiveness and accelerate the sell through. Regarding the market outlook in the future, the latest round of parts has more enduring effects on housing market, given its wider scope and the intensity compared to previous ones. It is worth noting that since October and through the 1st 2 weeks of November, The weekly existing home transaction volume on the platform have remained stable at high level, demonstrating a strong short term momentum.
We expect the market to be relatively stable in the Q4. For existing home prices, they are remaining stable in the short term, but there is a sustainability required for the observation. However, beyond the boost to the sentiment, so for the recovery of the economy fundamental, there's a key to ensure the property market bottom out. This relies on enhanced policy, focus on the overall market economy improvement. On top of policy stimulating housing demand, the further rollout of the measures on supply side, such as the support for developers and the inventory reduction will help rebalance supply demand in new home market and the revitalize the industry.
Continued favorable policy for the real economy will also provide greater support for residents' income expectations and the purchasing power, fundamentally stabilizing the real estate market. Thank you.
Conference Operator: Thank you. Your next question comes from Timothy Zhao with Goldman Sachs (NYSE:GS). Please go ahead.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): Great. Thank you, management, for taking my question. My question is regarding your Home renovation and furnishing business. As we have seen signs of recovery in the home transactions in both existing home and new home markets in September, how should we think about the growth outlook for Home Renovation business? Could you share some recent progress on this business line such as how you managed to improve the operating efficiency?
Thank you. Thank you, Timothy. In Q3, our home renovation and the furniture business achieved a steady growth. At full scale, our contracted sales reached RMB4.1 billion, making a year over year increase around 25% with revenue rising to RMB4.2 billion, up 33% year over year. Our cities such as Beijing, Guangzhou, Zhengzhou and Nanchang performed especially well and each achieved over 50% year over year growth in contract sales.
As for the profitability, home renovation contribution margin reached 31.2% in Q3, showing an improvement compared to the same period last year. That's mainly due to the following factors. First, we focus on re farm operation management. Since the home renovation construction involves lots of complex steps, we conduct a thorough review of each phase to identify key areas for the improvement. For example, we will notice excess materials.
We quickly adjust our construction problems and strengthen the internal control to minimize the material waste. We also continue to updating our product package during the initial design phase. We carefully analyze the cost and the construction standards for each type of product, running profitability model to ensure that each package makes a reasonable gross margin during the initial development phase. Additionally, we increased the proportion of centralized purchasing. For products with a high degree of authorization, we scale up the centralized purchasing at the group level.
The centralized procurement ratio for both maintained supplementary material reached over 30% in this quarter in Q3, while it was over 20% in the Q2. As our home run efficiency business has responded rapidly, we not only increased purchase volume from existing products, but also renegotiate unit prices to reflect our larger scale. While strengthening the profitability management, we're also continuously focused on improving our operational process and the models to enhance quality and boost customer satisfaction. For timeline management, we further shortened construction timelines by optimizing workflow and dispatch efficiency. This brought the combined timeline for basic construction and the preliminary material to average around 99.5 days in Q3, compared to 109.3 days in the same period last year.
Regarding after sales, while implementing priority and maintenance services, we responded our in house after sales team nationwide. Our up sales team grew from over 200 people at the end of last year to over 500 at the end of September this year. This team remotely and carefully address customer repair requirements and further enhance our customer satisfaction. In our home renovation business model of the quality, scale and efficiency, Collins remains as a core where we will continue to iterate and invest in building our infrastructure and the capability to strengthen quality foundation, which is essential to our to remain competitive in the future. Thank you.
Conference Operator: Thank you. Your next question comes from Griffin Chan with Citi. Please go ahead.
Analyst: So this is Griffin from Citi. I will translate my own questions. Baker has outperformed the market for both existing and new home business. With the management have confidence in sustaining this outperformance. Besides, Winok Data has been actively expanding store this year.
Would management please share your plan going forward? Thank you.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): Thank you, Griffin. This year, we focused on Hezhen and store level expansion and ecosystem development and proactively strengthening high level collaborations with developers in new home business. These efforts have all paid off, enabling us to continuously outperform the market. Regarding scaling our platform, our agent store network continue to respond. By end of Q3, the total number of acting non linear stores on our platform was more than 41,000 and the number of acting non linear agent was 315,000, up 16% and 4% year over year respectively.
We provided brands with the fitness comps, installment plans and other support to attract them to join our network. And in a volatile market, our platforms reach customer resources, extensive cooperation network, professional empowerment and the diversified service such as new home and home renovation had a stronger appeal to store outside of Nanook. Returns from our investment in stores function have remained good. From the platform perspective, by end of September, newly sent store in Q1 this year had a positive ROI with all regions covering their cost. As we made a steady progress in connecting stores, we have further shift our strategy into second half of this year from connecting small and the scattered community stores to large stores.
Accordingly, we raised the threshold of average number of agents per store, performance requirements and incentives. Our goal was to attract more quality store into the industry to join Beike to boost overall scale and efficiency. Regarding the store network operation, we'll adopt a more refined strategy at each individual business district level. For the areas fully covered by our network, we placed more emphasis on ecosystem optimization. We helped the store owner and agent retain more income through a series of the platform benefits and supporting measures.
Stock productivity in these commercial areas was 2 was 1.2 times as high as other commercial areas. In areas where our store collaboration was insufficient, we focused on our target management and the empowerment through the platform data analysis, problem diagnosis and the strategy support aligned with the involvement of the store owner or governance console. We promoted to focus on the card home listings, enhanced sell through and boosted the cooperation among stores. In areas with insufficient network coverage, we actively connect to the new stores through various types of storage function package. For existing stores, we piloted a points based incentive system in Q3 to motivate stores to enhance efficiency and optimize our ecosystem.
This system is essentially a membership program for the store owners through which the platform giving back returns as incentive to outstanding stores. Sisou's aim to achieving share value and win win between the platform stores. Amongst 9 color cities in Q3, the platform issues over 18,000,000 in equivalent cash benefit to store owners with 30% of store receiving this reward. The incentive system will bring more flexibility to our housing transaction business operation, while motivating store owners to engage more in our new business, including renovation and rentals. In our new home business, we continue to outperform the industry.
In Q3, our new home GTV reached RMB227.6 billion, up 18.4% year over year, compared with a 29% decline in the GTV of charity top line development. Meanwhile, our multifaceted rate continued to increase in Q3. The proportion of revenue from commissions In our new home business, our auto performance mainly comes from continuous increase in the number of Corvid projects, which reached a high of over 8,000 in Q3. In September, the number of our new projects accounted for 64% of all new home projects across cities where we operate, excluding Beijing and Shanghai, compared with 53% in the same period of last year. This was a result of growing recognition among developers for our sales capability as well as proactive effort to respond to collaborations.
We continue to make the breakthrough new strategy collaboration. We have already covered 7 out of the 10 top developers. Strategic collaboration differ from the top single project cooperation, which typically featured a competitive relationship between the two sides. In strategic collaboration, the two sides work as a partner to enhance the mutual understanding. We inform our corporate partner of the operations and the needs of our agents, market dynamics and additional service and value our platform efforts beyond the profit channel.
Through the top down promotions of such a warning in real estate companies, we have overcome difficulties in negotiation of city level projects leading to more corporate projects. Through the strategic collaboration, we can also better protect agents' rights. For instance, we incorporate customer private home private phone number protection and the equal protection period into the strategic collaboration framework to promote the fair cooperation. Moreover, we enhance the business conduct governance to improve operational transparency, putting developers' minds at ease in their cooperation with us. Our stable monetization and the receivables collection also motivate agents to work more actively on the new home sales, boosting our new home sales through.
Meanwhile, the agents' operational ecosystem has continued to improve the penetration of the customer profit from number protection rose to 6% in Q3, up by a year from Q2, bringing more sense of security of agent, which also improves our awareness to sales new home. Thank
Conference Operator: you. Thank you. Your next question is from Thomas Chong with Jefferies. Please go ahead.
Analyst: Thanks management for taking my question. My question is about our home rental business. As we see our KFC rent is undergoing fast growth pace. While this business requires quite a lot of involvement in operation, can management share about how we are different from others in terms of operations? Thank you.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): Thank you, Thomas. In Q3, revenue from our home rental services reached RMB3.94 billion, up 118.4 percent year over year. It's mainly due to the continuous increase in the number of the home unit under our management. By end of Q3, we were managing over 360,000 units under our carefree rent module compared to over 160,000 in Q3 last year. The contribution margin of our home rental services feels slightly quarter over quarter in Q3 due to the seasonality.
In the summer peak season of July August, our carefree rent saw rapid growth in unit size and occupancy, which increased commission costs for the channel referrals and the related personnel, which impacts contribution margin. Excluding the seasonal impact, the core metrics of the category run imports significantly year over year from January to September. Our operations focus on quality and efficiency have yields good results. On improving services to customers, we provide pre moving inspections, standardized handover services and tenant side property transfer services with a cumulative service count exceeded 970,000 provide a series of the core increase in the grants guarantees to our tenants. Also, we centralized the management of the 2 type of property managers, tenant service manager and the property service manager, to realize the centralized empowerment and the standardized services.
This has enhanced our post lease service capabilities and quality, while also leading to a continuous decrease in customer compliance rate. In terms of the operation efficiency, we continue to increase the percentage of the lease renewals, which helps reduce the channel cost associated with the re ranking and finding new tenants. We achieved this through improved post lead services, leading to increased tenant satisfaction and user retention. At the same time, we actively engage with tenants prior to lease expiration to discuss renewals, thereby boosting the renewal rate. By end of Q3, the lease renewal rate was around 52%, compared to 48% in the same period last year.
Regarding management's rental costs due to the vacancies, we shortened the days needed to rent out the properties through the refined operations. The time required to rent out the property for the 2nd time decreased to 7.5 days at the end of Q3 from 14.7 days at the beginning of the year. We also continue to optimize and upgrade our product module. The coverage of our new product module, which incurred no vacancy period, continue to rise in Q3. This model enhanced our resilience against the rental price volatility and reduce the vacancy costs.
The deposit cost per unit of our new car free run product module also dropped. This was mainly due to the improvement in the successful rate of the first time rentals, which rose to 82% at the end of Q3 from 76% the same time of last year, driven by higher personnel activities. We continue to build our own rental occupancy team, which enhanced the leasing efficiency, while keeping overall cost lower than the channel cost. By end of Q3, the rental occupancy contribution by this team was at 19%, up 5 percentage points from the same period last year. In addition, regarding Q3 operations, we took targeted measures to ensure the health and efficiency of our business in gig and the live seasons respectively.
The specialization strategy for the service providers based on their roles significantly boost our efficiency, leading to large scale growth and the incremental profit margin. In the peak season of July August, in particular, the personnel productivity of the unit since ops and occupancy improved notably year over year. Since entering the off season in September, we have implemented multiple strategies, including strengthening the rental occupancy, mix through our self built team and agent and improving their productivity using various marketing methods for the targeted customers, continuously manage lease renewals and the second time leasing presales and focusing on key areas of the housing unit subs and effectively managing inventory. Thank you.
Conference Operator: Thank you. Your next question comes from Miranda Jang with Bank of America (NYSE:BAC) Securities. Please go ahead.
Miranda Jang, Analyst, Bank of America Securities: Thank you for taking my question. My question is about Fei Haoxia. We see the news that Beihao Jia has successfully been in line in Chengdu City. So can management share with us about the project and the rationale about it? And then what's the company's business model for the Beihao Jia?
Thank you.
Tao Xu, Executive Director and CFO, KE Holdings (Beike): Thank you, Miranda. Our new business Beihao Jia, won a piece of land, sold the auction in Chengdu Kuo area of Xinjiang District, Financial City Phase 3 in September. We undertook this project after carefully review and the selection, and it will be operated by Beihao Jia team independently. We aim to use the pilot project like this to better validate our ability to implement our C2M solutions at every stage, including the land auction, product positioning, design and marketing. By creating model project, we can build trust with future partners such as developers, contractors and property owners towards our business model and the product solution, ultimately helping us achieving a long term life asset service platform model.
But it is very clear that we do not intend to become a real estate developer. In terms of our long term business model, we will not use our own capital for large scale heavy assets investment. We position the Beihao Jia as a data driven residential development service platform achieved through our 1 plus 2 business model. This includes C2M product solution, supported by our accumulated user insight and the big data and complemented by efficient customer acquisition and the marketing capability. This empower our partners in that chain to create homes that are well suited to customers.
C2I will be our core capability. It leveraged vast amount of data and AI technology to ensure the customer preference and demand are reflected in the new home plus such as possible. Regarding commercialization, we will charge service fees for offering an integrated set of solutions, including product positioning, initial and in-depth design rather than through the largest capital contribution or earning investment returns. Lastly, we were fortunate to acquire the land on September 20, right before the government roll out the subsequent bundle of favorable policies. This has made the land acquisition price highly competitive.
We believe this project will serve as a test bed for our capabilities, allowing us to accumulate know how to support the realization of our long term platform model. Thank you.
Conference Operator: Thank you. We are now approaching the end of the conference call. I will now turn the call over to your speaker host today, Ms. Siting Li for closing remarks.
Siting Li, IR Director, KE Holdings (Beike): Thank you once again for joining us today. If you have any further questions, please feel free to contact Beike's Investor Relations team through the contact information provided on our website. This concludes today's call and we look forward to speaking with you again next quarter. Thank you and goodbye.
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