Country Daily
China Property: Deeper Declines In Property Investment And New Construction In Jul 26; Weak Consumption Weighs On Consumer C-REITs
UNDERWEIGHT (Maintained)
Analyst
Analyst
Highlights
- The NBS published industry data for Jul 26, revealing weaker industry fundamentals, especially property investment. Tier 1 existing home prices kept rising, though at a slower pace.
- High frequency data for the first 16 days of Aug 26 showed demand still concentrated in Tier 1 cities. New-home sales in the four Tier 1 cities rose 16% yoy while Tier 2 cities fell 11%, leaving 19 major cities down 5% yoy. On a ytd basis (as of 16 August), Tier 1/2 cities changed by +3%/-8% yoy respectively. Second-hand transactions in three Tier 1 cities rose 9% yoy, with the gain still driven by Shanghai, while nine Tier 2 cities fell 4% yoy. Meanwhile, second-hand home listing prices continued to trend downward.
- Maintain UNDERWEIGHT. Our top picks are COLI and CR Mixc.
Analysis
Jul 26 NBS data: Property investment and starts worsen; sales decline moderates. Property investment dropped 28.7% yoy in Jul 26, further worsening from Jun 26's decline of 26.0% yoy. New property construction declined 28.5% yoy in Jul 26, worsening from the drop of 26.0% yoy in Jun 26, while the decline in property completions narrowed to 20.0% yoy from 25.0% yoy. While the yoy decline in new home sales narrowed in Jul 26, with gross floor area (GFA) sold dipping 14.5% yoy in Jul 26 (vs a drop of 16.3% yoy in Jun 26) and the value of new-home sales falling 10.4% yoy in Jul 26 (vs a decrease of 15.5% yoy in Jun 26).
Highlights
- The NBS published industry data for Jul 26, revealing weaker industry fundamentals, especially property investment. Tier 1 existing home prices kept rising, though at a slower pace.
- High frequency data for the first 16 days of Aug 26 showed demand still concentrated in Tier 1 cities. New-home sales in the four Tier 1 cities rose 16% yoy while Tier 2 cities fell 11%, leaving 19 major cities down 5% yoy. On a ytd basis (as of 16 August), Tier 1/2 cities changed by +3%/-8% yoy respectively. Second-hand transactions in three Tier 1 cities rose 9% yoy, with the gain still driven by Shanghai, while nine Tier 2 cities fell 4% yoy. Meanwhile, second-hand home listing prices continued to trend downward.
- Maintain UNDERWEIGHT. Our top picks are COLI and CR Mixc.
Analysis
Jul 26 NBS data: Property investment and starts worsen; sales decline moderates. Property investment dropped 28.7% yoy in Jul 26, further worsening from Jun 26's decline of 26.0% yoy. New property construction declined 28.5% yoy in Jul 26, worsening from the drop of 26.0% yoy in Jun 26, while the decline in property completions narrowed to 20.0% yoy from 25.0% yoy. While the yoy decline in new home sales narrowed in Jul 26, with gross floor area (GFA) sold dipping 14.5% yoy in Jul 26 (vs a drop of 16.3% yoy in Jun 26) and the value of new-home sales falling 10.4% yoy in Jul 26 (vs a decrease of 15.5% yoy in Jun 26).
UNDERWEIGHT (Maintained)
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
