Hello, ladies and gentlemen. Thank you for standing by for KE Holdings Inc.'s fourth quarter and fiscal year 2021 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I'll now turn the call over to your host, Mr. Matthew Zhao, IR Director of the company. Please go ahead, Matthew.
Thank you, operator. Good evening, and good morning, everyone. Welcome to KE Holdings Inc., or Beike's fourth quarter and fiscal year 2021 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 website, www.investor.ke.com. On today's call, we have Mr. Stanley Yongdong 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 we will make forward-looking statements.
Please also note that Beike's earnings press release and this conference call include discussions of our audited GAAP financial information, as well as our audited non-GAAP financial measures. Please refer to the company's press release, which contains a reconciliation of the audited non-GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in renminbi. With that, I will now turn the call over to our Chairman and CEO, Mr. Stanley Peng. Please go ahead, sir.
Thank you, Matthew. Hello, everyone. Thank you for joining Beike's fourth quarter 2021 earnings conference call. 2021 was a year of unprecedented hardship, with Lao Zuo's passing, the significant reduction in the real estate market, and the new paradigm for the internet-based platform economy. Massive changes took place both internally and externally, posing many new challenges to our company. However, this is not uncharted territory for us. Over the past 21 years, difficulties and change have accomplished us and gotten us where we are today. For an organization, it's not hardship when everyone within it is working together toward a common future goal. It's not hardship when an organization proactively resolve a problem it encounter and get better and stronger from the experience each time. This is when hardship become a blessing.
Rising to challenges, transforming through changes, and deriving more vitality in the process is embedded within our DNA. This is also our stance and solution to address the current hardships. Market fluctuations have their own logic and invisibility. The many changes happening right now, or that will happen in the future, have their seeds sown a long time ago. From a long-term perspective, the market will revert to its mean, and in the short term, the market will gradually recover. Our underlying belief about the housing-related industry has never changed. It's certain that digitalization catalyzes industry transformation. Service providers are indispensable. Service quality builds customer trust and transcend market cycles. It's also certain that a business model or industry is characterized by slow early-stage development, which means it will take time to establish a virtuous cycle.
Yet, once we move past the inflection point, business will take off very quickly. All the right things we are doing now will surely sow the seeds for a better future. Therefore, we have a deep peace of mind. We are undisturbed by external fluctuations, and we propel ourselves to looking forward for answers. Be the enterprise of the era. That's our answer. At the end of 2021, we officially launched Beike's One Body, Two Wings strategic upgrade. One Body refers to our core, which is our existing and new home transaction services business, while Two Wings refers to our home renovation and furnishing offerings and our inclusive housing services. Through our upgraded strategic focus, we aim to fully energize our wings as we accelerate our core business progress towards its goals.
Building an increasing presence in the wide housing-related service industry, reaching consumer more broadly, and enduring through a diverse array of services and product innovations, and becoming a new living services provider that make home a better place. By that, we are responding to the higher requirements put forward to us by our country and society in this era. Capturing to consumers' fast evolving demands from finding a place to live to a place of enjoying living as housing price stabilizes. At the same time, meeting an organization's need for continuous iteration and progress. It provides long-term vision for our talent and drive the organization to thrive. Can we do this? If something is relevant to our mission and vision, and it is something we have a strong desire and adequate ability to accomplish, we can. Why can we do this?
Over the past 21 years, Lianjia expanded its single city presence in Beijing to nationwide, and Beike grew from a pilot in Zhengzhou and several cities to a platform operating in over 100 cities across China. During this time, we iterated a complete set of methodologies to grow from zero to one for the industry, industrial internet. We accumulated rich experience and learnings, such as cultivating key capabilities in each stage and finding the right place for the team. Sometimes you can't go too fast. If you want a tree to grow taller, you can't rush it to blossom or bear fruits. The aim needs to be higher and faster. Other times, you must speed up and keep running forward with all your strengths to achieve fast iteration.
Our team is extremely adept at reflection and abstract thinking, which enables us to constantly learn from experiences, accumulate and improve. Our profound set of zero-to-one methodologies also give us full confidence in our expansion into new business areas. Next, moving to our fourth quarter of 2021, our progress implementing the One Body, Two Wings strategy and our future plans. Thanks to property policy support, the market has showed signs of bottoming out since the fourth quarter of last year. However, it will take time for transaction volume to fully recover and the industry supply side to further contract in Q1. According to data from Beike Research Institute, as of the end of last year, the industry number of agents has contracted by at least 30%-40%, with wide variation across cities.
In comparison, on the Beike platform , we had 51,000 connected stores by the end of the fourth quarter, up 8.7% year-over-year and down 5.4% quarter-over-quarter. The number of actual stores exceeded 45,000, up 4.4% year-over-year and down 8.3% quarter-over-quarter. The quarter-over-quarter store reduction was mainly due to few newly added stores during the market down cycle, as well as store merge to stay competitive. At the end of the fourth quarter, we had around 455,000 agents on our platform, a decline of 7.8% year-over-year and 11.8% quarter-over-quarter.
Actual agents were around 407,000, down 8.7% year-over-year, 13.1% quarter-over-quarter, and 18.6% lower from its peak in the second quarter of 2021, which was in line with our expectation. Our resilience compared with the broader market was largely due to our ACE mechanism and agent specialization, which brought our agent more opportunities to take part in transactions and more stable income. This, together with the base compensation guarantee to high quality agents provided by solid store owners, empowered our platform with stronger agent retention capability and resilience. Meanwhile, given the lower housing transaction volume in the fourth quarter, we temporarily cut back our online advertising budget and experienced a decrease in platform traffic.
In the fourth quarter, we had 37.4 million MAUs on the Beike app and the Mini Program, down 13.2% year-over-year. Nevertheless, as the market recovers, we expect our online traffic to resume growth in 2022. Moving on to existing and new homes. Regarding existing home transaction services, according to data from Beike Research Institute, GTV of existing home sales market dropped 43% year-over-year in the fourth quarter, and the GTV of existing home transaction on Beike's platform was CNY 354.6 billion, down 39% year-over-year. Of which, existing home sales declined 41%, slightly better than the overall market. Existing home transaction volume in some key cities have started to bottom out. We believe the key to successful brokerage business operation is collaboration and focus.
In 2021, we established rules such as agent specialization and agent and store ranking system. We refined our existing home sales leads allocation mechanism and direct agents and stores to focus on homeowners retention through platform resources deployment, all of which enable us to lead agent to focus and collaborate, strengthening the superior and exclude the inferior. We are also firmly committed to investing in industrial infrastructure. As of the end of last year, we started to operate 298 contract service center in 30 key cities, and over 90% of the existing home transaction signing process was completed in these centers. As part of our infrastructure, these centers not only improve customer signing experiences, ensure funds safety, but will also become one of the best scenarios to direct traffic to our emerging business segments.
Turning to new home transaction services. The new home market declined 20% year-over-year in the fourth quarter, and GTV or new home transaction on Beike's platform dropped 24%, slightly underperforming the market. Mainly as we cut back our new home transaction business due to the liquidity risks of developers to ensure the long-term health of our business. From a short-term perspective, it will take more time for the overall new home market to recover. We have prioritized new home risk management to ensure safe home turnovers to buyers and the payment collection by service providers. With the premise, we also hope to help developers through higher sales through efficiency.
The key to improving sales throughput is to provide a work environment that gives agents a sense of security with the knowledge that they will receive their commission on time, and their transaction will not be broken by any misconduct, such as client information leakage that has prevailed in the industry. In 2021, we continue to promote new home business conduct improvement plan, establishing infrastructure and a comprehensive procedures to prevent, intervene, deter and penalize misbehaviors. We investigated and deal with over 3,000 non-compliance cases throughout the year. Agents were feeling safe, safer doing new home sales business. We further develop our systems and tools to enhance agent capabilities. Our Xiao Bei training camp also ensure enhanced agents familiarity with new home projects and their ability to introduce them to customers.
98% of agents in the pilot program use our Xiao Bei assistant at night to answer questions on their behalf and pick up the conversation the next day, significantly reducing the loss of customers at night. Looking forward, regarding our One Body, the housing transaction services business, we have a committed goal in mind and a clear path to get there. Our goal is to offer better customer experience and gather more capable and ACE agents, store managers, and the brands. The path leading to this long-term target is simple. Take care of our customer and helping service providers take care of the customers, empower agents and raising their professional ethics, improve store quality, and become friends with the communities.
In 2022, the first target for our core business segment is to nurture capable ACE and a dignified service providers, advance their professionalism. Second, we will pay more attention to improve the platform operation efficiency of our home transaction business. We will continue to improve organizational flexibility to quickly respond to any changes and take measures according to either increase or reign in expenses. Third, the strengths in our Body will facilitate the development of our Two Wings as we build a higher efficiency customer referral model to our new business. Next, moving to our progress and plans for our Two Wings, new business development. We define 2021 and 2022 as the year during which our home renovation and furnishing services business group takes roots.
We believe that customer demand for home renovation and furnishing will continue to grow as housing prices stabilize. In this market, helping service providers is a key to enhance consumers' experience, standardization and digitalization, along with renovation product upgrades at the core of improved service providers' capability and delivery quality. In developing our renovation and furnishing offering, we started with the hardest part in the home renovation innovation process, delivering a high-quality interior construction finish. Over the past few years, we have laid the groundwork for this business. This part of our business seems slow, but once we nail it will take off quickly. We have already advanced from zero to one in the home renovation business. We are determined. Our team is confident and motivated by the positive feedback from customers. We have built a replicable regional model.
Shengdu is the most significant piece of the puzzle we have found, which allow us to replicate our model more rapidly at scale to go from 1 to 100. In 2021, we built up our capabilities to support expansion in a standardized manner at a large scale. In building our underlying capabilities, we institute a scientific management approach with respect to scheduling, transaction orders, and a cooperation mechanism. We officially rolled out the Home SaaS version 1 system covering the entire home renovation business with multiple modules that could enable process standardization and enhance process productivity. For example, its BIM version 1 system has become the industry-first product covering design, rendering, detailing, and modularization into a bill of materials.
Bolstered by our strong capabilities, Beike's self-operated home renovation business, Beiwoo, has become an industry leader in terms of construction standards and construction cycle, as well as process management and control. In 2021, we deliver our tender offer to Shengdu Home Renovation, China's leading home renovation and furnishing service brand, and the transaction has been approved by the SAMR. As of the end of 2021, Shengdu has more than 110 stores in 31 cities nationwide. We kicked off the preliminary integration between Shengdu and Beike. Shengdu has an absolute leadership position in the industry when it come to size, organizational management, internal cost control, and supply chain management. Beike has a unique capability in digitalization, standardization of complex industry process, and customer acquisition in home renovation and furnishing, not to mention a sizable talent pool of industrial internet professionals.
Our combined companies are leveraging our respective advantages to generate substantial synergies and build China's number one home renovation and furnishing brand to empower the entire industry. Looking forward to 2022, we hope to accelerate the expansion of our home renovation and furnishing business, as well as the development of our underlying capabilities. With respect to building our capabilities, first, we will improve our ability to provide high-quality services through establishment of middle-office capabilities, guarantees, and training. Second, we will focus on improving capabilities of construction delivery from both online and offline. Third, we will establish standardized operations to the construction delivery process, service provider certification, and so on. We will also continue to iterate our Home SaaS version 2.0 system and invest in our talent pool.
Supported by our upgraded underlying capabilities, we will actively expand our home renovation and furnishing business in nine cities, where Beike's housing transaction services have core advantages. Our housing transaction services will refer customers to our Two Wings business. In the pilot cities, our home transaction services already contribute 3% of the new business customer leads in the fourth quarter. We are optimistic we can achieve further breakthroughs in 2022 after integration, fostering remarkable growth for our overall home renovation and furnishing business through the large-scale connection with high-quality service providers, plus customized home furnishing products sales on the back end. The second wing of our One Body, Two Wings strategy is inclusive housing services. It carries out affection and devotion to our country and responsibility to society. It mainly covers home rentals, plus a wide range of value-added home services.
The housing supply gap is a prominent problem for new urban residents, young adults, and low-income groups who are in the most urgent need of improving their living conditions. The national policy specifically encourage both home purchase and renting. We will deeply participate in this industry in the future, increase high-quality rental housing supply, and elevate the quality of the industry through diverse solutions and broader external collaborations, providing real solutions to livelihood problems and improving living environments inclusively. Our inclusive business, housing business is divided into three categories, general home rental brokerage services, light rental property management services, and the centralized service apartments, plus value-added home services. In 2021, over 2.5 million general home rental transactions were completed on our platform, up 41% year-over-year.
In the second half of 2021, we launched a rental commission fee reduction campaign for fresh university graduates in cities such as Beijing, and offer our support to more than 1,600 university students in finding their first home after graduation. The light rental property management services managed more than 11,000 units in 2021 on average, up over 51% year-over-year. As to infrastructure, we promoted post-rental housekeeping services by providing a comprehensive variety of convenient home services for tenants and realized penetration of over 80% in the pilot program. In 2022, we will deepen our exploration of diversified solutions for inclusive living from both the supply side and the user end.
We will make efforts in diversifying model to address over 100,000 rental units for new urban residents, young people and the low-income groups. On the consumer side, we plan to provide a comprehensive guarantee system for all types of tenants. This, coupled with diversified home services offer, will provide tenants with a safe and high-quality rental experiences. Lastly, it's a great honor for us to do business in China's housing-related service sector, a fertile ground full of promise. No matter whatever comes our way, we will give back to this land, to our society and the people through our inclusive housing initiatives and more diverse solutions in the future. We, as an organization, will forever strive to go ahead and stay open.
With that, I would like to turn the call over to our CFO, Tao Xu, for a closer review of our first quarter and full year financials.
Thank you, Stanley, and thank you everyone for joining us. Before discussing more details about our first quarter and the fiscal year 2021 financial results, I would like to provide a brief overview of the housing market in 2021. Beginning the second half of 2020, overall housing price began to rise sharply, fueled by an economic recovery and over dealers' expectation in the capital market. In order to cool the red-hot housing market, the government have introduced a variety of policies with unprecedented frequency and intensity, most notably, tightened the credit measures. This measure precipitated a steep decline, the volume of the existing home sales declining 47% in September compared to June. This, in turn, negatively impact the new home market. Since approximately 40% of new home transaction rely on the funds from the existing home sales.
The financial health of many real estate developers was triggered by the debt defaults from some high-profile, large-scale developers. This brought a significant blow to the debt market, making it even more difficult for many developers to issue the new debt to repay old ones. With concern for rippling debt scenario, many local banks curbed developer funds withdrawal from escrow account, leaving some developers in a serious cash shortage position. The combined negative consequences of all of these factors were many. Firstly, more developers faced debt defaults in the second half of last year. Secondly, cash-strapped developers stopped payment to both upstream and downstream suppliers. Thirdly, some developers start to liquidate their valuable assets, including Sunac, who sold Beike's share in order to strengthen their cash reserve. Developers also offered a hefty discount to promote quick project sales and clear inventories.
Fourthly, land sales lapsed as developers stayed on the sidelines. Facing these headwinds, beginning in Q3 last year, the China housing market froze across the nation. Rapidly deteriorating conditions prompted policymakers to fine-tune some regulations starting in Q3 last year, pledged to promote the health development of the housing market and better meet the reasonable demand for the home buyers. Since then, marginal relaxation in credit measures have brought some signs of thaw. The volume of the existing home transaction has picked up slightly, while new home transaction are still pending developers' short and liquidity status. We expect market sentiment will gradually recover in the first half of 2022.
Although the market recovery was still nascent and fragmented in Q4, which muted the overall transaction volume. We are able to utilize this opportunity to optimize our execution and lay the groundwork to better position for the further market recovery, as was reflected in our operational and financial results in Q4. Turning to our financial details in Q4. Our net revenues were RMB 17.8 billion in Q4, compared to 22.7 billion in the same period of 2020, exceeding both high ends of our guidance and the Street consensus. The decrease was primarily attributable to the decline of total GTV of 34.6% to RMB 732.4 billion in Q4, from RMB 1,120 billion in the same period of 2020 due to the market downturn.
In particular, our net revenue from existing home transaction services were RMB 6.0 billion in Q4, compared to RMB 9.2 billion in the same period of 2020. Primarily due to a 39.4% decrease in GTV of existing home transaction to RMB 354.6 billion in Q4, from RMB 584.7 billion in the same period of 2020. Our net revenue from new home transaction services decreased by 12.2% to RMB 11.3 billion in Q4, from RMB 12.9 billion in the same period of 2020.
Primarily due to a 24% decrease in GTV of new home transactions to RMB 356.8 billion in Q4, from RMB 469.2 billion in the same period of 2020, which was partially offset by a moderate increase of new home transaction commission rate. Our net revenue from emerging and other services were RMB 0.5 billion in Q4, compared to RMB 0.6 billion in the same period of 2020. Primarily attributable to the decrease of net revenue from the financial services. Cost of revenues was RMB 14.9 billion in Q4, compared to RMB 17.2 billion in the same period of 2020. Gross profit was RMB 2.9 billion in Q4, compared to RMB 5.4 billion in the same period of 2020.
Gross margin was 16.4% in Q4, compared to 23.9% in the same period of 2020. The decrease in gross margin was mainly due to one, a continuing shift of revenue mix towards new home transaction services with a lower contribution margin. Two, a lower contribution margin of existing home transaction led by a relatively higher percentage of fixed compensation cost for the agent. And three, a relatively higher percentage of cost related to store of net revenue in the fourth quarter of 2021 as a result of incremental rise in the rental fees of contract service center opened in 2021, and the increased depreciation and amortization cost. Operating expenses were RMB 4.1 billion in Q4, compared to RMB 4.2 billion in the same period of 2020.
General and administrative expenses were RMB 2,202 million in Q4, compared to RMB 1,884 million in the same period of 2020, mainly due to the increase of provision for credit losses. Sales and marketing expenses were RMB 809 million in Q4, compared to RMB 1,323 million in the same period of 2020, mainly due to the decrease of brand advertising and the promotional marketing activities. Research and development expenses were RMB 738 million in Q4, compared to RMB 740 million in the same period of 2020, mainly due to the increase of highly experienced R&D personnel, which was partially offset by the decrease of the share-based compensation expenses.
Loss from operations was RMB 1,084 million in Q4, compared to income from operations of RMB 1,267 million in the same period of 2020. Operating margin was -6.7% in Q4, compared to 5.6% in the same period of 2020, primarily due to, one, relatively lower gross profit margin in the fourth quarter of 2021 compared to the same period of 2020. Two, an increase in percentage of total operating expenses as % of net revenue in fourth quarter of 2021, primarily due to decreased net revenue, along with relatively flat operating expenses in the fourth quarter of 2021, compared to the same period of 2020.
Excluding non-GAAP items, our adjusted loss from operation was RMB 398 million in Q4, compared to adjusted income from the operation of RMB 2,231 million in the same period of 2020. Adjusted operating margin was -2.2% in Q4, compared to 9.8% in the same period of 2020. Adjusted EBITDA was RMB 484 million in Q4, compared to RMB 2,897 million in the same period of 2020. Net loss was RMB 933 million in Q4, compared to net income of RMB 1,096 million in the same period of 2020.
Excluding non-GAAP items, adjusted net income was CNY 42 million in Q4, compared to CNY 2,001 million in the same period of 2020. Net loss attributable to KE Holdings Inc. ordinary shareholders was CNY 930 million in Q4, compared to net income attributable to KE Holdings Inc. ordinary shareholders of CNY 1,095 million in the same period of 2020. Adjusted net income attributable to KE Holdings Inc. was CNY 45 million in Q4, compared to CNY 2,000 million in the same period of 2020. For the fourth quarter of 2020, diluted net loss per ADS attributable to KE Holdings Inc. ordinary shareholders was CNY 0.78, compared to diluted net income per ADS attributable to KE Holdings Inc. ordinary shareholder of CNY 0.93 in the same period of 2020.
Adjusted diluted net income per ADS attributable to KE Holdings Inc. ordinary shareholders was RMB 0.04, compared to RMB 1.71 in the same period of 2020. Even during the market downturn, we were still able to remain strong cash position and again, the positive cash flow generated from the operating activities in Q4. As of December 31, 2021, the combined balance of company's cash equivalents, restricted cash and the short-term investment amounted to RMB 56.1 billion or $8.8 billion. Additionally, as of December 31, 2021, the balance of our long-term cash items, mainly including the long-term investment amounted to RMB 14.9 billion or $2.3 billion. Turning to our financial details in fiscal year 2021.
Although we experienced a sharp market downturn in the second half of last year, that significantly impacted our operations and financial results. We still achieved a resilient year-over-year growth of our top line in 2021. For the fiscal year of 2021, our net revenue increased by 14.6% to RMB 80.8 billion from RMB 70.5 billion in 2020. Primarily attributable to a 10.1% year-over-year increase of our GTV to RMB 3,853.5 billion in 2021 from RMB 3,499.1 billion in 2020. Our gross profit decreased by 6.2% to RMB 15.8 billion in 2021 from RMB 16.9 billion in 2020.
Our gross margin was 19.6% in 2021 compared to 23.9% in 2020. The decrease in gross margin was mainly due to, one, a continuing shift in revenue mix towards new home transaction services with a lower contribution margin. Two, a lower contribution margin of its in-house transactions as a result of the higher percentage of the fixed compensation cost for the in-house agents and the compensation cost for the transaction support staff. Three, a lower contribution margin of new home transactions led by the increased proportion of new home sales transaction completed by the connected agent and other sales channels. There's incremental rise in the fixed compensation cost for its function of dedicated sales team with expertise on the new home transaction services in 2021.
Our loss from operations was RMB 1.4 billion in 2021 compared to the income from operation of RMB 2.8 billion in 2020. Operating margin was 91.7% in 2021 compared to 4% in 2020, primarily due to, one, a relatively lower gross margin profit in 2021 compared to 2020. Two, an increase of percentage of total operating expenses as of net revenue in 2021, primarily due to the increase of staff-related expenses, provision for credit losses, and the impairments of the goodwill incurred in 2021 compared to 2020. Excluding non-GAAP items, our adjusted income from operation was RMB 1.4 billion in 2021 compared to RMB 5.9 billion in 2020.
Our net loss was RMB 525 million in 2021 compared to net income of RMB 2,778 million in 2020. Excluding non-GAAP items, our adjusted net income was RMB 2,294 million in 2021 compared to RMB 5,720 million in 2020. In mid-December, we were attacked and forced to defend ourselves against a groundless allegation led by a published short seller report towards our company. Upon receiving the report, the audit committee quickly launched an internal review process with the assistance of the third-party professional advisors, including an international law firm and the forensic accounting experts from Big Four accounting firm that is now company's auditor.
In late January, before Chinese New Year, we announced the successful completion of the review, which were conclusive in its findings that all allegations were not substantiated. It clearly shows the evidence of our high standards and effort in data integrity, corporate governance, and internal control. We sincerely appreciate extensive support and the trust we receive from our investors during this period. I want to take this opportunity to publicly reiterate our commitment to maintaining those high standards, transparency, and timely disclosure in compliance with applicable rules. To sum up, as Stanley mentioned, 2021 was undoubtedly a challenging year for us. Yet, despite the formidable challenge, we made further solid progress in fulfilling our commitment to support our service providers and bring a normal service and joyful living to our customers.
One Body, Two Wings will guide our strategy function into the housing-related complementary services in 2022, and bring meaningful financial impact in fiscal year 2022 and beyond. I will now speak about our near-term focus and plans. Firstly, for our housing transaction services, we will focus on the profitability and the cash generation capability by further honing efficiency in our management and operating initiatives, along with continuing to invest into the industry infrastructure and our agent training. The steps we took in Q4 to better optimize our organization have made us more flexible in embarking on our new One Body, Two Wings strategy, and will further drive our operating leverage. We will also continue to focus on the prudent cash management and accounts receivable risk controls, considering the ongoing uncertainties from developers' operation in the first half of this year.
Benefited from our effective management of the receivables, our DSO for the new home transaction services further reduced to 97 days in 2021 from 103 days in 2020. According to Beike Research Institute, overall market GTV of both existing home and the new home transaction is expected to trend down year-over-year in 2022. As a result, we expect our GTV of the housing transaction services will observe the similar trend. Secondly, for our two wings, home renovation and furnishing services and the inclusive housing services, while we are dreaming big, we will move forward with careful steps. In directing both strategic businesses, further investment will be required and this will have an impact to overall group's profitability in 2022. We firmly believe this investment will yield long-term economic benefits and position us well to capture burgeoning new demand in complementary sectors.
Turning now to guidance for the first quarter of 2022. As stated in our Q3 earnings call, we foresee the market will likely hit bottom in Q1 of 2022, and will gradually, with time, gain traction into recovery from this point. Considering the housing market is still at the early stage of recovery and adding the high base effect of the same period in 2021, we expect overall market GTV of existing home sales to fall about 50% year-over-year in Q1. Overall market GTV of the new home transaction to decrease over 40% year-over-year in Q1, according to Beike Research Institute.
Based on the above considerations, looking forward to the first quarter of 2022, we expect the total net revenue to be between RMB 11.5 billion and RMB 12.5 billion, representing a decrease of approximately 39.6% to 44.4% from the same quarter of 2021. This forecast considers the potential impact of the recent real estate-related policy and measures as the company's current and preliminary view of the business situation and market conditions, which is subject to change. All in all, as we move forward to 2022, the toughest winter is gradually fading away. The year for the better living is coming to focus with the tremendous opportunity around the living at all fronts. In the depths of winter, we found within us an invincible summer.
As we continue to pursue our mission and capture adjacent opportunities, we will stay resilient, strengthen vertical capabilities, and most importantly, keep an open mind. Our decades of experience with housing transaction services has prepared us well to level up the playing field for vastly expanding the impact of better living. We will continue to help service providers develop and operate with professional ethics and expertise, and win the respect from their high-quality services. We firmly believe our continued effort to bring our customer the services and experience, and our proven track record of overcoming difficulties, will eventually lead us to a better tomorrow. That concludes our prepared remarks. We would like now to open the call for your questions. Operator, please go ahead.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask questions, you will need to press star one on your telephone. To withdraw your question, please press the pound or hash key. For the benefit of all participants on today's call, please limit yourself to one question. If you have additional questions, you can re-enter the queue. If you are going to ask questions in Chinese, please follow with English translations. Our first question comes from the line of Piyush Mubayi from Goldman Sachs. Please go ahead.
Hi, Stanley,
Sure.
Thank you for taking my question, and congratulations on the unveiling of the One Body, Two Wings strategy. My first question is about Following the decline that we've seen in GTV in fourth quarter and the guidance you've given for the first quarter, could you take us through how the market conditions have been since? If I can slip in a second question: with the recent policy loosening, how should we set or reset expectations for housing recovery trends in 2022? If you could take us through that period quarter by quarter, both in terms of price and volume, that would be great. Thank you again.
Thank you, Piyush. This is Tao Xu. Regarding your first question, so how is the market condition since 4Q last year? I would like to say, since the first quarter, the Chinese government has signaling stabilization for the macro market and the housing policies, aiming to rectify the previous overtightened policy under the theme of housing for living, not for speculation. The improving credit environment also help unlock the pent-up demand. At the policy implementation level, response were promptly made to the central government policies. For administrative measures, over 30 cities introduced the supportive policies focusing on the less restriction on the mortgage, home buying, and sales, as well as the developers' pre-sale proceeds.
For credit environment, that is a key factor for the housing market and has been improving recently, with a significant betterment in the mortgage rates and the approval process. As of January 2022, the first home and the second home interest rate fell by 0.16% and 0.18% versus the peak season of last September, respectively. The mortgage origination cycle shortened to 50 days in 103 cities in January 2022. This is also a normalized level similar to March 2021, and 23 days less than the peak season in last October. The improving credit environment at the consumer side directly contributes to market recovery or impacts both the agents and the homeowners' expectations and the sentiment bottomed out since November last year.
For existing home sales, the improving credit environment injects liquidity to facilitate the recovery. According to Beike Research Institute, China's existing home market in Q4 last year shrank around 43% year-over-year and 21% quarter-over-quarter. The Beike existing home transaction GTV dropped by 39% year-over-year, among which the existing home sales GTV dropped by 41% year-over-year and 4% quarter-over-quarter. Market-wise, driven by the improving credit environment, the existing home transactions that are inventory-dependent were fulfilled, and the performance in certain upper-tier cities bottomed out. Monthly transaction volume in 20 out of 32 cities as monitored by Beike saw sequential growth for 3 consecutive months. The quarter-over-quarter decrease in Q4 versus Q3 was mainly due to the high base in last July and August.
The existing home transaction on Beike platform also bottomed out in last Q4, witnessed by the month-over-month GTV growth of 11%, 7%, and 19%, respectively for October, November, and December. For new home sales, China new home sales market GTV dropped 20% year-over-year, but posted 9% growth quarter-over-quarter. The new home sales GTV on Beike dropped 24% year-over-year and 13% quarter-over-quarter. The broader new home sales market, despite a slight rebound in Q4, the 9% quarter-over-quarter growth is much slower versus the average 18% growth in the first quarter in past 5 years. Lower-tier cities performance weaker, albeit with the policy easing, it will still take time for the home buyers to restore their confidence.
We expect the sustained downside pressure to continue in new home market with divergent performance across different cities. For Beike, new home sales in Q4, and we continue to prioritize the stability and opt for a prudent strategy for new home sales, with a focus on the strengthening risk management mechanism, reducing the receivable collection risks, and seeking incremental opportunities. We proactively suspend cooperation with the high-risk projects, adopt for a conservative revenue recognition policy, and a timely prudently made provision for potential account receivable risks. Regarding your second question for the expectation on the housing recovery trends this year by quarter and also the volume and the price with the recent policy loosening. Looking ahead to 2022, there are three things we are very sure of. The first is the rectification of overtightened policy.
The second will be the strong consumer demand and the direct demand for the home living. The third thing will be market transactions will return to the steady volume. Based on these views, overall market GTV of home transaction is expected to decrease around 6%-14% year-over-year, of which existing home down by low teens year-over-year and the new home down by 5%-10% year-over-year. That said, we expect the decline in transaction volume to narrow down from 2Q onwards, and the market should see a positive year-over-year growth in the second half. At a macro level, the Chinese government has reiterated its emphasis on the stabilized growth for the macroeconomy in 2022.
The Chinese government is calling for proactively introducing policies positive to the economic stability and cautiously implementing policies with the tightened side effects. Such a goal of stabilized growth that necessitates the role of the housing as a pillar industry. Beike Research Institute, we recently foresee the neutral to accommodative monetary policy stance to continue with 1 RRR cut and 2 LPR cuts this year. In 2022, estimates the housing-related investment to remain flat versus 2021, underpinning the stable performance across housing sales and the entire industry value chain throughout the year. We also estimated that this year we will see a steady recovery of the housing market driven by credit environment and administrative tailwinds. On the credit side, as estimated by the Beike Research Institute, further mortgage interest rate cuts and credit supply will pace the market demand.
That will lead to a higher gross mortgage supply versus the year of 2021, which will drive to unlock the rigid and upgraded demand as a catalyst for the housing consumptions. On the administrative measures, we are expecting more local government to relax the demand-side measures in 2022, such as easier criteria for the first home recognition, fewer home purchase and sales restrictions. Demand for the housing remains massive, and it will require time to unleash. Based on our estimation on, accommodative policy environment and a secular stable demand growth trajectory, we expect a backloaded process of a gradual market recovery in 2022.
In general, the 2022 new home sales market GTV is estimated at around RMB 15 trillion, down around 5%-10% year-over-year, factoring in around the 10% year-over-year decline in the gross floor area according to Beike Research Institute. Existing sales market GTV is estimated at around RMB 6-7 trillion, down by low teens% year-over-year, factoring the low teens% year-over-year decline in gross floor area. On combined basis of existing and new home market, the total market GTV is estimated at RMB 20-22 trillion, down around 6%-14% year-over-year.
Regarding this quarter, Q1 should see a sequential decline both in existing and new home sales market GTV versus Q4 2021 due to the seasonality, like the Chinese New Year and the impact of the COVID-19, and reach a trough in this cycle as we briefed during Q4 earnings calls. We recently foresee the year-over-year decline of the 50% for the existing home sales market GTV and almost 40% decline for the new home market GTV in Q1. We expect that the existing home transaction to stabilize post-Chinese New Year, leading to a gradual recovery both in the existing home sales and new home sales in Q2, with a significantly narrower year-over-year decline versus Q1. Starting from Q3, according to Beike Research Institute, we expect the year-over-year GTV growth for both existing and new home sales to turn positive.
In the second half of 2022, we expect existing and new home sales market GTV to achieve an overall 25% and 15% year-over-year rebound respectively. Thank you.
Thank you for the questions. Next question is from the line of Ashley Xu of Credit Suisse. Please go ahead.
Thank you, management, for taking my question. Since you have just discussed the market outlook, could we also go through Beike's business outlook for year 2022? Also, would you give us some color on the company's strategy and investment this year in both core business and the Two Wings? Thank you.
Thank you, Ashley, and I will answer Beike's business outlook in 2022, and will invite our Chairman Stanley to answer the follow-up question, the color of our new strategy, One Body, Two Wings. Based on our outlook, just as I answered to PH, we will deploy our effort under the One Body, Two Wings strategy. On GTV and agent store sides, we reasonably foresee the Beike existing home transaction GTV will be able to outperform the broader market in the recovery cycle. For new homes segments, we will closely monitor developer rates in the first half of 2022, focus on the transaction safety and manage accounts receivable rates. Our new home sales performance is expected to be in line with the market.
On the agent and store sides, we foresee a 14% month-on-month in Q1 2022 for our platform stores, as well as agent count. Compared to Q1 2021, we expect the number of active stores and agents on our platform to grow by low single digits in 2022. For monetization and profitability, we will lay more emphasis on our operational efficiency for our platform and connected stores, realized by stable monetization rates and the platform take rates for our core business, including existing and new home transaction services. We'll continue our strict cost control starting from 4Q 2021.
With these measures, the contribution margin is also expected to increase both for the existing and the new home sales. This year marks a new chapter for our new business development. Our home renovation and furnishing, Beike will draw upon this customer acquisition advantage and leverage construction delivery and execution capability of Beiwoo and Shengdu to expand, especially in nine key cities. Shengdu is expected to be consolidated in our financial statement and generate significant revenue contribution upon the completion in the second half of this year. Our inclusive housing service business is in a ramp-up phase. In a longer horizon, the Two Wings business will effectively mitigate and offset the impact of the market downturns in our core business, and capture additional revenues from stable environments.
I would like to invite our Chairman Stanley Peng to give some color for our strategy One Body, Two Wings.
对，因为我们提到一体两翼，其实这里面可能有几个问题。第一就是说这个为什么在当下提出这个战略？我想呢，根本有两个变化。第一个变化呢，是消费者的变化，从这个买到房然后到住得更好，包括像家装啊，围绕家的服务啊，其实都是围绕着住得更好。这是第一个消费者的变化。第二个变化呢，就是从这个价值的变化。我想中国很多的这种企业吧，都要从追求商业的这种价值，到商业价值和社会价值并重这样一个变化，那这个呢，是一个大的前提。第二呢，我想可能为什么贝壳要去，用一体两翼去回答，这个现在这个战略的问题。核心我想可能满足三个条件。第一个呢，就是它和我们的使命非常契合，因为贝壳的使命是有尊严的服务者、更美好的居住。就是围绕着家，围绕着这个有尊严的服务者，像经纪人啊，工长、工人啊，围绕家庭的这种服务，其实都是我们在使命上去要坚守的。第二呢，就是我们有能力去做，包括过往这些实践，对于线上线下的理解，对于大团队的管理，对于流程的标准化，都是我们有能力去做的。第三个呢，就是我们有意愿去做，因为在当下呢，就是承担这些挑战，因为这个每个产业的很多赛道呢，就是看起来容易，道理讲起来都很简单，但是如果真的把它做下去，那是非常挑战的。这个呢，是我们有意愿去做。所以这个呢，是我们有三个问题。当然围绕着每一个，每个赛道呢，我想我们还有一些。
Yeah. This is Stanley. Let me quickly address your question in terms of the One Body, Two Wings strategies, right? I think in terms of the One Body and Two Wings strategy, that actually related to a couple of questions. First question is why we actually has been announced and launching the One Body and Two Wings strategy at current stage. I think the fundamental reason behind that is we actually monitor the two of the fundamental changes from the market as well as the society. Firstly is in terms of the consumer's attitude is and their value actually has been significant change from buying the house to living better, right?
That's actually bring us very good opportunities to bring the changes. The second changes is coming from the, you know, the valuation as well as the proposition for all the enterprise. I think now more and more of the enterprise actually has been valued both of the commercial value as well as the social value at the same stage. We do believe followed by those two of the changes is the right time to launch of our new strategies. The second question related to One Body, Two Wings is how we can execute that, right?
I think that there are a couple of strengths I want to address there. First is our mission of the company, which is the admirable services and the service provider with the dignity then bring the joyful living. Within our industry, rather than the agents, we do notice for other service providers such as foreman, workers, as well as other, you know, the housing services related or the home services related.
There are all the different types of the service providers, which is eager to improve their professionalism as well as bring the better services to the customers. Secondly is we actually have the capability to do that. In the past two decades, we actually has been accumulating a lot of different capabilities in terms of standardization, in terms of the online and offline execution, as well as other part. That actually gave us more confidence to doing those part of business. The third thing is we have the willingness to do of those kind of you know the business. That's the first two question I want to address related to One Body, Two Wings strategy.
对，然后那个，这个聚到一体两翼里面呢，我觉得有很多很具体的问题。当然我想任何一个商业组织啊，都在三个地方去解这个命题，一个呢是规模，第二呢是品质，第三个呢是效率。好像这个三个三角形哈，都是往往就是说三个题都解是比较难的。所以我们在一体两翼里面呢，其实我们在，也有相应的这个重点，对于一体，核心的就是品质和效率。就是如何能有更好的品质。所以我们今天看来，优质的服务者，包括在新房里面，优质的开发商，优质的代理公司，优质的门店，优质的品牌，其实都是接下来呢，是被，被合团结的力量在这一块呢，提高我们的品质，包括在服务者、品牌上进行投入。同时呢，在效率上，刚才涛哥也分享了，不但会提高我们自己本身的这种，在资金使用上很多方面这些效率，啊，这是对一体。那么两翼呢，核心就是第一个是品质，第二是规模。那因为对于两翼来说呢，是从零到一，或者说从一到十，在方向在走。那么家装啊，我们的家装里面的核心是，第一家装像，其实在这里面有很大一，就是最大的一个行业的一个这个悬念啊，就是有没有一个，在装修里面能过一百亿的这样一个商业模式能产生。我们今年呢，也会在和成都呢会形成五个，我们叫五个一，啊，就是一套系统，一个流程，一套标准，一个组织，最重要的是一个目标，啊，通过这五个一，能够实现在整个家装的产业的重构。那么对于汇居来说的话呢，核心就是，团结在租赁啊，包括保障性住房啊，包括类似于青拓管呀，城市的新青年啊，城市白领啊，包括员工宿舍呀，这个新蓝领啊，很多这些领域的团结，行业优质的服务供给。同时呢，结合我们在一体的过往二十多年的实践，然后把这些，行业呢能够团结起来，同时呢，能够，为一些优质的服务者吧，能够赋能，包括线上啊，人才啊，包括基础设施啊很多方面，那通过这些呢，可以，对，能够把这个，围绕着我们自己做得更好吧，包括我们自己的社会责任和商业价值，能够创造更多的，可能。
In terms of the One Body, Two Wings strategies, there are a couple of the most important factors, which we have mentioned many times before, including the scalability, quality as well as the efficiency. When we develop a business, no doubt, we cannot promote all the three parts simultaneously. At every stage we have a focus. In terms of One Body business, which we believe at current stage we should continually improve by improving the service quality to further improve the efficiency.
We will continue to find out more about the different, you know, excellent service providers in the One Body business, for example, like the good brands, good stores, good developers as well as other parts. Meanwhile, we also will make a balance between the investment as well as efficiency as our CFO Tao Xu has mentioned before. We'll further improve our cash use efficiency in order to bring the further changes into our One Body business.
On the other hand, in terms of the Two Wings business, we do believe the current focus will be using the further service quality improvement to bring the better scalability. For example, in terms of our home decoration and furnishing business, I think for that part of industry, there still has a question is whether one company can bring over 10 billion RMB revenue per year. So far we didn't see that, but hopefully after we cooperate, we should do together, and we can bring more breakthrough in terms of the business model into the home decoration and renovation furnishing business. I think this year we'll continue promote what we call the five one strategies, which means one organization, one standard, one process, and one system. Most importantly is one goal, right?
In order to further bring the better scalability business for the home decoration and furnishing. Meanwhile, for the other, on the other wing, which is called the inclusive housing services, we do believe we should continue to unite the different types of the supply in the society, including the life model as well as others, you know, the supplies in the society more tailor-made to the young generation, or even to you know, the blue-collar workers or etc. Right?
By consolidating all those kind of, you know, the high quality of the supply of the industry, we do believe we can, using our capability to further empower them in the different parts, such as talent, infrastructure, in order to bring a better balance between the company's commercial value as well as the social value. Yeah. Thank you. That's my answer to your question. Back to you, operator.
Thank you. Next question comes from Thomas Chong of Jefferies. Please go ahead.
早上好，谢谢管理层接受我的提问。我有两个问题，第一个是关于我们门店数量下降的原因，管理层可以大概解释一下这个的原因吗？第二的话是关于我们 Q4 应收账款的坏账的情况。谢谢。
Thomas, could you translate your question into English?
Yes, sure. Thanks management for taking my questions. My question is about the decline in terms of the store numbers. Can management comments about the reason behind? My second question is about the AR, the accounts receivable in Q4. Can management comments about the bad debt situation? Thank you.
Okay. Thank you, Thomas. This is Tao Xu. Let me ask you the first question regarding the decline in the number of stores in the fourth quarter. The number of broker stores on Beike platform reduced approximately 2,900 sequentially in Q4, down around 5.4% quarter-over-quarter. Around 4,100 connected stores disconnected from the platform in Q4, and an increase of 400 versus Q3, while approximately 1,200 connected stores newly joined the platform in Q4, 2,300 less than Q3. Therefore, the decrease in the total number of stores on the platform is mainly driven by the slowdown of the newly connected stores in Q4. As the market drops, the platform slowed down the pace of connecting new stores to focus on improving the operational efficiency.
At the same time, the number of stores meeting our selection criteria but are not yet connected has declined during the market downturn as well. For disconnected stores, the quarterly number increased by 400 quarter-over-quarter, of which 310 stores disconnected due to the store merger, aimed at enhancing the competitiveness during a market downturn. In addition, the disconnection due to the violation as a percentage of the total disconnected stores was only 7% lower than that in Q1 2021, showing our effective governance of the platform ecosystem throughout the year. In Q1, as the market bottomed during the Chinese New Year, the common practice such as merging and shutting down stores is likely to occur.
Some stores may also choose not to renew their leases when expiring around the year-end or before Chinese New Year, resulting in a further decline in the number of stores on our platform. However, the number of stores on the platform is expected to increase gradually after market stabilized in Q2. Regarding the second question for the bad debt and whether we have any risk for the collection, I would like to say as a first, number tops, there is no material risk for Beike's new home business. If you look at our just earnings release of DSO, reduced from 103 days in 2020 to 97 days in 2021. In 2021, the total commission revenue from new home sales was RMB 46.5 billion, while our collection was RMB 51.7 billion in this year.
Our company had approximately RMB 11.5 billion of accounts receivable for Q4, including approximately RMB 11 billion for the new home transaction services. Whereas the cash collection for the new home transaction services was approximately RMB 12.6 billion in Q4. The bad debt provision for accounts receivable and other receivable in Q4 total RMB 620 million, representing quarter-over-quarter increase of RMB 250 million. Beike strategically increased the bad debt provision in Q4 due to several reasons. First, on one hand, due to the continuous downturn of the new home market, developers' liquidity risk increased significantly. Therefore, the increase in the scope and the percentage of bad debt provision reflect Beike's principle in adopting the most prudent and the strictest accounting treatment amid exacerbating market risks.
The second is the classification of more projects as high risk, and the increase of bad debt provision will encourage our frontline teams to explore more business opportunities from the low-risk projects, and reduce the proportion of the high-risk project in the future. Although there are still some developers under the liquidity pressures to repay debts, we have recently seen a series of easing policies for developers, such as acquisition loans no longer counting towards the Three Red Lines, relaxation of the control over pre-sale proceeds. It is believed that these measures marginally ease the developer liquidity risk, but it will take time for the policy to be fully effective. The rebound of sales and the subsequent receiving of cash will ultimately solve the challenges developers face at this moment, while improving the sales throughput is exactly where Beike's strength lies.
For our internal risk control, we will continue the initiative we have been taking over the past to improve our dynamic risk control module for monitoring the real estate developers and their new home projects. Through advanced assessment based on our risk weighting mechanism, we will avoid cooperation on the high-risk projects and cease cooperation of the risks exposed and focus on the repayment. All in all, I would like to say Beike's bad debt provision for the new home transaction services was a proactive choice made by risk based on our prudent accounting policy. We do not believe Beike's new homes business will face material risk because Beike enjoy the high degree of independence in its new home business.
Since our business are not reliant on relationship, but on our extensive network of the sales and channels, high quality of service, recognition by our customers and our reputation. We closely monitor risk and implement the countermeasures as soon as we perceive them. We believe the industry will be in a better shape in the future despite the short-term pain. Thank you.
Thank you for all the questions. We are now approaching the end of the conference call. I'll now turn the call over to your speaker host today, Mr. Matthew Zhao, for closing remarks.
Thank you, operator. Thank you once again for all of you 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. Take care. Thank you, and goodbye.