Periodic/Sector reports
China Property: Second-hand Sales Outperform New-Home Sales In Sep 26; Tier 1 Cities Property Transactions Rebound In Oct 26
UNDERWEIGHT (Maintained)
Analyst
Analyst
Highlights
- New-home sales growth slowed in Sep 26, while second-hand sales remained more resilient. The 14-city average rental yield rose further by 0.12ppt yoy to 2.59% as prices fell faster than rents. Land market sentiment continues to be concentrated in Tier 1 cities, with land sales in 300 cities/Tier 1 cities dropping 21% yoy and rising 14% yoy respectively in 9M26.
- Property transactions in Oct 26 thus far are encouraging, with Tier 1 new-home and second-hand sales rising 44%/54% yoy respectively. This could possibly be due to the mortgage rate subsidy. The overall price trends remain on a downward trajectory.
- Maintain UNDERWEIGHT on the sector. Top picks are COLI and CR Mixc.
Analysis
- In Tier 1 cities, new-home sales growth moderated in Sep 26 despite Beijing’s post-easing rebound. According to Puri, residential GFA sold in Tier 1 cities rose 1.5% yoy in Sep 26, down from +4.7% in Aug 26, while residential GFA sold in Tier 2/3 cities fell 16.4%/42.3% yoy respectively. We attribute part of the slowdown to the high base, as Tier 1 sales rose 6.2% yoy in Sep 25 after falling 16.5% in Aug 25. In Sep 26, residential GFA sold in Beijing /Shanghai/ Guangzhou/Shenzhen sales changed by +29.6%/-11.3%/-8.3%/+1.2% yoy respectively, with Beijing’s up 46.5% mom in its first full month after the 7 August easing. In 9M26, GFA sold fell 3.4%/10.1%/8.4% yoy in Tier 1/2/3 cities respectively.
- Second-hand sales growth is relatively stronger than new-home sales. According to iFind, second-hand sales in three Tier 1 cities and seven Tier 2 cities rose 7.9%/4.7% yoy respectively in Sep 26, against +11.9%/+4.5% yoy in Aug 26. We attribute the slowdown in Tier 1 cities mainly to the high base, as Sep 25 sales rose 27.6% yoy. Second-hand sales in Shanghai (+15.7% yoy) grew for the seventh consecutive month, while that in Beijing (+0.8%) and Shenzhen (-2.5%) lagged. In 9M26, second-hand sales rose 9.3%/1.3% yoy in Tier 1/2 cities respectively.
Highlights
- New-home sales growth slowed in Sep 26, while second-hand sales remained more resilient. The 14-city average rental yield rose further by 0.12ppt yoy to 2.59% as prices fell faster than rents. Land market sentiment continues to be concentrated in Tier 1 cities, with land sales in 300 cities/Tier 1 cities dropping 21% yoy and rising 14% yoy respectively in 9M26.
- Property transactions in Oct 26 thus far are encouraging, with Tier 1 new-home and second-hand sales rising 44%/54% yoy respectively. This could possibly be due to the mortgage rate subsidy. The overall price trends remain on a downward trajectory.
- Maintain UNDERWEIGHT on the sector. Top picks are COLI and CR Mixc.
Analysis
- In Tier 1 cities, new-home sales growth moderated in Sep 26 despite Beijing’s post-easing rebound. According to Puri, residential GFA sold in Tier 1 cities rose 1.5% yoy in Sep 26, down from +4.7% in Aug 26, while residential GFA sold in Tier 2/3 cities fell 16.4%/42.3% yoy respectively. We attribute part of the slowdown to the high base, as Tier 1 sales rose 6.2% yoy in Sep 25 after falling 16.5% in Aug 25. In Sep 26, residential GFA sold in Beijing /Shanghai/ Guangzhou/Shenzhen sales changed by +29.6%/-11.3%/-8.3%/+1.2% yoy respectively, with Beijing’s up 46.5% mom in its first full month after the 7 August easing. In 9M26, GFA sold fell 3.4%/10.1%/8.4% yoy in Tier 1/2/3 cities respectively.
- Second-hand sales growth is relatively stronger than new-home sales. According to iFind, second-hand sales in three Tier 1 cities and seven Tier 2 cities rose 7.9%/4.7% yoy respectively in Sep 26, against +11.9%/+4.5% yoy in Aug 26. We attribute the slowdown in Tier 1 cities mainly to the high base, as Sep 25 sales rose 27.6% yoy. Second-hand sales in Shanghai (+15.7% yoy) grew for the seventh consecutive month, while that in Beijing (+0.8%) and Shenzhen (-2.5%) lagged. In 9M26, second-hand sales rose 9.3%/1.3% yoy in Tier 1/2 cities respectively.
UNDERWEIGHT (Maintained)
Analyst
Analyst
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