Highlights

• During the first two weeks of July, both new-home sales and second-hand home transactions across core cities saw a seasonal mom slowdown while maintaining a positive yoy growth. Meanwhile, overall housing prices continued to trend downward.
   
• All four Tier 1 cities have seen continuous declines in inventory months since Mar 26, mainly due to the ongoing reduction in saleable GFA.
   
• Maintain UNDERWEIGHT. Our top picks are COLI and CR Mixc.
   

Analysis

• High-frequency data for the first two weeks of Jul 26 showed that new-home sales and second-hand home transactions across core cities saw a seasonal mom slowdown while maintaining a positive yoy growth. Meanwhile, overall housing prices continued to trend downward.

1. New-home sales in 19 major cities grew 23% yoy and decreased 10% mom in the first two weeks of Jul 26. In Tier 1/2 cities, average daily sales increased 24%/15% yoy respectively, accelerating from the previous week. Beijing/Shanghai/Guangzhou/Shenzhen saw their new-home sales change by +22%/+37%/-5%/+86% yoy respectively in the first two weeks of Jul 26. 
    
2. Average daily sales of second-hand homes (by number of units) in three Tier 1 cities and nine Tier 2 cities rose 17% and 12% yoy respectively. Beijing/Shanghai/Shenzhen saw their average daily second-hand home sales jump 16%/23%/2% yoy respectively in the first two weeks of Jul 26.
    
3. According to the ICE Index updated on 12 July, average listing prices of second-hand homes in 100 major cities fell 0.1% wow and 0.5% mom. Among the four Tier 1 cities, the listing price index of Beijing/Shanghai/Guangzhou/Shenzhen fell 0.1%/0.0%/0.2%/0.1% wow, changed by -0.5%/+0.1%/-0.5%/-0.2% mom, and has changed by -2.3%/+1.7%/-2.6%/-0.9% ytd respectively. Shanghai continues to lead in second-hand home listing prices.