China property market Report Interpretation

Overview

This weekly China property update contrasts softer primary-market activity and subdued land demand with improving secondary-market leading indicators. Goldman Sachs also reviews policy measures, construction indicators and the valuation of its covered developers.

Core views

Primary-market activity weakened in Week 37. New-home gross floor area sold across about 75 cities fell 4% week on week, although it was still 5% higher year on year, while new-home search activity declined 1.3% week on week. Year to date, primary GFA sold averaged 11% below the prior year and remained 17% and 36% below 2024 and 2023 levels, respectively. The report's near-term sales read is also cautious: property sales in about 75 cities suggest top-100 developers' contract sales could decline 16% year on year in September, versus a 4% decline in August. Secondary-market data were comparatively firmer. Transactions rose 6% week on week but were down 1% year on year across about 20 cities. More forward-looking secondary indicators strengthened: subscription sales, which the report says lead registration-based sales by one to two weeks, rose 14% week on week, while visitation increased 13%. Agents' price-appreciation expectations improved for a third consecutive week, although home sellers' expectations softened slightly. Secondary listing supply rose 21% week on week, partly reflecting seasonality. On a year-to-date basis, secondary GFA sold was 2% higher year on year and 13% and 14% above 2024 and 2023 levels. Inventory was broadly stable rather than improving further during the week. Inventory balance was flat week on week and stood 7.9% below end-2025 levels; inventory months were 27.0, compared with averages of 27.1 in July and 27.2 in August. This leaves the market with a still-elevated inventory overhang despite the reduction from end-2025. The land market cooled after the 8-28 policy development. Xiamen became the first major city to attach a completed-sales requirement to a land auction, while local implementation standards remain divergent. Citing CREIS and CRIC, the report says developer bidding pulled back sharply in the second week after the policy change and most plots traded at floor price. Goldman Sachs interprets this as greater acquisition caution amid uncertainty over implementation of the new sales model and expects land-market volumes to remain subdued in the near term. Local policy support continued: Henan introduced differentiated land-supply restrictions tied to destocking periods and housing-count relief for multi-child families; Changsha Wangcheng offered a combined subsidy package that could reach about Rmb180k per unit; and Jiangsu introduced 30% fiscal support for purchases of commercial housing stock to be used as university student dormitories. Construction indicators remain weak. Goldman Sachs' Property Completion tracker, based on its China float-glass supply-demand outlook and weekly float-glass demand model, indicates a high-teen year-on-year decline in completions for August 2026 and forecasts a 15% decline for FY26E. The report notes July declines of 19% year on year according to NBS and high teens according to Goldman Sachs estimates. New starts are expected to decline by a high-twenties percentage year on year in August, following a 28% decline reported by NBS in July; the assessment draws on land-sales trends in 300 cities and a nationwide cement-shipment ratio that rose 2.5 percentage points week on week to 45.7%. For BEKE, Goldman Sachs estimates combined new- and existing-home GTV was likely flat year on year from July through mid-September, comprising a 9% decline in new-home GTV and an 11% rise in existing-home GTV. This compares with the internet team's 3Q26E estimate of 1% year-on-year growth overall, with new and existing segments flat and up 1%, respectively. Developer shares weakened in Week 37. Covered stronger SOE developers fell 4% week on week on average, versus a 6% average decline for other developers. China Resources Land, CMSK and Poly each fell 2%, the smallest declines among the stronger SOE group. Offshore covered developers fell 6% on average compared with a 2% fall in MSCI China, while onshore covered developers fell 3% on average compared with a 2% fall in CSI 300. The report nevertheless characterizes valuation as being at downturn-trough levels: offshore coverage traded at an average 43% discount to end-2026E NAV and 0.4x 2026E P/B, while onshore coverage traded at a 24% NAV discount and 0.4x P/B. For context, the report compares these with historical trough discounts and P/B levels in 2H2008, 2H2011 and 1H2014.

Analysis framework

Goldman Sachs combines weekly transaction, search, subscription, visitation, listing and inventory trackers with policy developments and land-auction observations to assess near-term property demand. It uses land sales, cement shipments and a proprietary float-glass supply-demand model to infer starts and completions, then compares covered developer share performance and estimated NAV and P/B valuations with historical downturn troughs.

Methodology notes

• Industry AnalysisSupply-demand framework

  Property supply-demand tracking through sales, inventory, land activity, construction indicators and float-glass demand.

  The report uses market demand and supply indicators to interpret housing activity and to infer likely construction completions and new starts.

• Valuation methodsNAV (Net Asset Value)

  Discount to estimated end-2026 net asset value.

  The report compares covered developers' market valuations with estimated NAV to show the extent of their discounts.

• Valuation methodsPB valuation

  2026E price-to-book comparison against prior downturn troughs.

  P/B multiples provide a second valuation reference and are compared with historical trough periods.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Resources Land (01109.HK)

  Covered stronger SOE developer; rated Buy in the valuation table.

  Strengths

  Its share price declined only 2% in Week 37, among the smallest declines in the stronger SOE group.

  Weaknesses

  Its share price still fell during the week.

  Comparison

  The report groups it with stronger SOE developers, which fell 4% on average versus 6% for other developers.

  Risks

  Exposure to weak primary sales, subdued land activity and sector-wide share-price pressure.

• China Overseas Land & Investment (00688.HK)

  Covered stronger SOE developer; rated Buy in the valuation table.

  Strengths

  Included in the stronger SOE developer group.

  Comparison

  Included in the report's offshore developer valuation comparison.

  Risks

  Exposure to weak primary sales, subdued land activity and sector-wide share-price pressure.

• Greentown China (03900.HK)

  Covered developer; rated Buy in the valuation table.

  Comparison

  Included in the offshore developer valuation comparison.

  Risks

  Exposure to sector demand and valuation pressure.

• China Jinmao (00817.HK)

  Covered stronger SOE developer; rated Buy in the valuation table.

  Strengths

  Included in the stronger SOE developer group.

  Comparison

  Included in the offshore developer valuation comparison.

  Risks

  Exposure to weak primary sales and subdued land activity.

• CMSK (001979.SZ)

  Covered stronger SOE developer; rated Neutral in the valuation table.

  Strengths

  Its share price declined only 2% in Week 37.

  Comparison

  The report identifies it as one of the least-declining stronger SOE developers during the week.

  Risks

  Exposure to weak primary sales, construction weakness and sector-wide market pressure.

• Poly Developments (600048.SH)

  Covered stronger SOE developer; rated Neutral in the valuation table.

  Strengths

  Its share price declined only 2% in Week 37.

  Comparison

  The report identifies it as one of the least-declining stronger SOE developers during the week.

  Risks

  Exposure to weak primary sales, construction weakness and sector-wide market pressure.

• Longfor Group (00960.HK)

  Covered developer; rated Neutral in the valuation table.

  Comparison

  Included in the other-developer valuation comparison.

  Risks

  Exposure to sector demand and valuation pressure.

• Seazen Group (01030.HK)

  Covered developer; rated Sell in the valuation table.

  Comparison

  Included in the other-developer valuation comparison.

  Risks

  Exposure to sector demand and valuation pressure.

• Vanke A (000002.SZ)

  Covered developer; rated Sell in the valuation table.

  Comparison

  Included in the other-developer valuation comparison.

  Risks

  Exposure to sector demand and valuation pressure.

• Vanke H (02202.HK)

  Covered developer; rated Sell in the valuation table.

  Comparison

  Included in the other-developer valuation comparison.

  Risks

  Exposure to sector demand and valuation pressure.

• BEKE

  Property transaction-platform exposure linked to new- and existing-home GTV.

  Strengths

  Existing-home GTV was estimated to be up 11% year on year from July through mid-September.

  Weaknesses

  New-home GTV was estimated to be down 9% year on year over the same period.

  Comparison

  Combined GTV was likely flat year on year, versus the internet team's 3Q26E estimate of 1% growth.

  Risks

  A weaker-than-expected property transaction environment.

Key data

• Primary GFA sold, Week 37-4% wow; +5% yoyAcross approximately 75 cities.
• Primary GFA sold, YTD-11% yoyAlso 17% and 36% below 2024 and 2023 levels.
• Secondary transactions, Week 37+6% wow; -1% yoyAcross approximately 20 cities.
• Secondary leading indicatorsSubscriptions +14% wow; visits +13% wowSubscriptions lead registration-based sales by one to two weeks, according to the report.
• Inventory months27.0Flat week on week; compared with average 27.1 in July and 27.2 in August.
• September top-100 developer contract sales outlook-16% yoyImplied by sales in approximately 75 cities, versus -4% in August.
• FY26E property completions-15% yoyGoldman Sachs estimate.
• Covered developer valuationsOffshore: 43% NAV discount and 0.4x P/B; onshore: 24% NAV discount and 0.4x P/BBased on estimated end-2026 NAV and 2026E P/B.

Impact & implications

The report presents a divided near-term property picture: secondary-market indicators are improving, but primary sales, land acquisition appetite and construction activity remain weak. Policy support is expanding through destocking and purchase-incentive measures, while the valuation analysis suggests covered developers trade at levels comparable with past downturn troughs.

Risks

• Uncertainty over local implementation of the new sales-model policy may keep developers cautious on land acquisition.
• Primary sales could weaken further, with the report indicating a likely 16% year-on-year decline in September top-100 developer contract sales.
• Construction activity remains pressured, with completions and new starts expected to decline sharply year on year.

What to watch

• Whether stronger secondary subscriptions and visits translate into registration-based sales over the following one to two weeks.
• September contract sales for top-100 developers.
• The pace and local implementation of post-8-28 land-market policy changes and resulting land-auction volumes.
• Inventory months and the effect of local destocking measures.
• August completions, new starts and BEKE transaction GTV trends.