Periodic/Sector reports
China Property: Shanghai Shifts Housing Supply From New Build To Renewal; National Land Supply Keeps Shrinking
UNDERWEIGHT (Maintained)
Analyst
Analyst
Highlights
Shanghai's 15th Five-Year Plan targets to cut new supply of residential units and step up efforts in commercial facilities upgrading. This may become a recurring trend over the next five years in higher tier cities.
We expect pre-sale reforms to further cool the land market, following an 18.4% yoy decline in land sales across 300 in 8M26. Sales remained divergent: new-home sales in 19 major cities fell 3% yoy in Aug 26 but rose 3% yoy in 1-6 September, led by Tier 1 cities (+12% and +39%, respectively).
Maintain UNDERWEIGHT. Our top pick is COLI.
Analysis
Shanghai published its 15th Five-Year Plan for urban renewal and housing development on 3 September, cutting new supply of residential units and stepping up efforts to upgrade commercial facilities. The table below summarises the key targets. Over 2026-30, Shanghai plans to reduce new residential housing supply by 33-40% and new residential land supply by 21-38%, while targets for commercial properties upgrading increase 56% and the target for retrofit activity increases by 92%. Specifically, the commercial property upgrading will primarily driven by a) expansion of usage; b) repositioning of underperforming buildings; c) tenant remixing and upgrading; d) data monitoring; and e) focusing on key areas (Lujiazui, Hongqiao, Caohejing and Wujiaochang). Indicated by Shanghai’s plan, we expect tighter residential supply and the upgrading of commercial properties to become defining trends over the next five years in higher tier cities.
Highlights
Shanghai's 15th Five-Year Plan targets to cut new supply of residential units and step up efforts in commercial facilities upgrading. This may become a recurring trend over the next five years in higher tier cities.
We expect pre-sale reforms to further cool the land market, following an 18.4% yoy decline in land sales across 300 in 8M26. Sales remained divergent: new-home sales in 19 major cities fell 3% yoy in Aug 26 but rose 3% yoy in 1-6 September, led by Tier 1 cities (+12% and +39%, respectively).
Maintain UNDERWEIGHT. Our top pick is COLI.
Analysis
Shanghai published its 15th Five-Year Plan for urban renewal and housing development on 3 September, cutting new supply of residential units and stepping up efforts to upgrade commercial facilities. The table below summarises the key targets. Over 2026-30, Shanghai plans to reduce new residential housing supply by 33-40% and new residential land supply by 21-38%, while targets for commercial properties upgrading increase 56% and the target for retrofit activity increases by 92%. Specifically, the commercial property upgrading will primarily driven by a) expansion of usage; b) repositioning of underperforming buildings; c) tenant remixing and upgrading; d) data monitoring; and e) focusing on key areas (Lujiazui, Hongqiao, Caohejing and Wujiaochang). Indicated by Shanghai’s plan, we expect tighter residential supply and the upgrading of commercial properties to become defining trends over the next five years in higher tier cities.
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.
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