Mainland secondary-home transactions grow moderately; Hong Kong new-project sell-through weakens

Overview

This report tracks high-frequency transaction, online registration, viewing, listing, price, new-project sell-through, visitor arrival, stock performance, and credit-market data for the Mainland and Hong Kong property markets. Mainland secondary transactions remain positive year on year, and primary online registrations have also improved, but viewings, broker manager confidence, and listing price indicators have not formed a broad-based recovery. The Hong Kong market is showing clearer short-term cooling signals, with new-project sell-through rates, secondary transactions, and leading valuation indicators weakening simultaneously.

Core views

For the Mainland, real-time secondary transactions in nine cities rose 5% year on year, first-tier cities rose 7% year on year, and official secondary online registrations in twelve cities rose 12% year on year, showing that secondary demand remains resilient. Listings in ten cities have fallen by about 5% from the March peak, easing supply pressure somewhat, but the listing price index in first-tier cities remains near historical lows, indicating that price recovery is not yet solid. In Hong Kong, new-project sell-through rates fell sharply while selling prices were broadly stable, reflecting a more cautious stance among buyers; after secondary home prices rose 11% year to date, weekly prices, transactions, and the Centaline Valuation Index all weakened, supporting the view that momentum will slow in the second half of 2026.

Analysis framework

The report uses a weekly high-frequency data monitoring approach, cross-validating real-time transactions with official online registrations that lag by several weeks, and assesses volume and price trends using viewing volumes, broker manager confidence, listing prices, listing quantities, new-project sell-through rates, and leading valuation indices. It also compares the relative performance of the property sector versus the HSI, changes in southbound holdings, and the performance of the JACI China High Yield Property Index, while adding analysis of credit events for key companies and bonds.

Methodology notes

• High-Frequency Transaction MonitoringCross-Validation of Real-Time Transactions and Official Online Registrations

  Use real-time transactions to observe recent demand, then confirm the trend with official online registrations.

  Real-time secondary transactions typically lead official sales registrations by several weeks, so the year-on-year direction and magnitude of change in both types of indicators should be interpreted together.

• Market SentimentViewing Volume and Broker Manager Confidence Leading Indicators

  Assess transaction activity and short-term expectations through customer viewings and broker manager confidence.

  A viewing index below 20 indicates market stagnation, 20 to 40 indicates recovery, and 40 to 60 indicates activity; the first-tier city index fell from 22 to 21 this period, remaining in the low-level recovery range.

• Supply-Demand and PricesCombined Analysis of Listings and Listing Prices

  Listing volume measures potential supply, while listing prices reflect sellers' pricing intentions.

  A decline in listings usually helps price stability, but current listing price indicators remain weak, suggesting that supply improvement has not yet fully translated into upward price momentum.

• Hong Kong New-Home MarketComparison of Sell-Through Rates by New-Project Batch

  Compare selling prices, premiums or discounts to secondary homes, and sell-through rates across different batches to assess demand sensitivity.

  The sell-through rates for two projects this period were significantly lower than previous batches despite broadly stable selling prices, indicating that demand has become more cautious.

• Relative Value and CreditRelative Performance of Stocks, Indices, and Bonds

  Compare property securities performance against market benchmarks, sector indices, and individual bond yields.

  The report also observes property stocks' relative performance versus the HSI, southbound holdings, the JACI China High Yield Property Index, and yields on key perpetual and maturing bonds.

Asset mapping & comparison

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

• COLI, CR Land, China Jinmao, CR Mixc

  J.P. Morgan lists them as its top picks among Mainland property stocks.

  Strengths

  Benefit from transaction resilience, core-city exposure, and relatively stronger operations or asset quality.

  Weaknesses

  Sector listing prices remain weak, and overall property stocks underperformed the HSI last week.

  Comparison

  Compared with highly leveraged private developers, the report prefers platforms with more stable fundamentals and financing capacity.

  Risks

  Slowing sales growth, further price declines, and policy support weaker than expected.

• Link REIT, Swire Properties, Hongkong Land

  J.P. Morgan lists them as its top picks among Hong Kong landlord stocks.

  Strengths

  Leasing assets and recurring income are relatively more defensive.

  Weaknesses

  Slower visitor growth and weaker economic activity may affect tenant sales and the rental outlook.

  Comparison

  When sell-through of new residential projects in Hong Kong weakens, landlord companies are relatively more defensive than pure residential developers.

  Risks

  Weaker retail sales, higher capitalization rates, and downward revisions to asset valuations.

• SHKP

  J.P. Morgan lists it as its top pick among Hong Kong developers.

  Strengths

  It has a strong brand, project pipeline, and integrated asset base.

  Weaknesses

  Only 51% of the third batch of Garden Regency was sold, reflecting weaker demand for new projects.

  Comparison

  Compared with developers under greater financial pressure, its balance sheet and project execution capabilities are more advantageous.

  Risks

  Continued slowdown in sell-through, declining home-price momentum, and a lengthening inventory cycle.

• CKH, Jardine Matheson

  J.P. Morgan lists them as its top picks among conglomerates.

  Strengths

  Business diversification helps spread risk from a single property market.

  Weaknesses

  Complex business structures and geographic exposures may weaken valuation transparency.

  Comparison

  Compared with pure property developers, they have lower direct sensitivity to the Hong Kong residential sales cycle.

  Risks

  Asset disposals falling short of expectations, slower macro growth, and widening holding-company discounts.

• New World Development 10.131% perp, 12.179% perp

  J.P. Morgan maintains an overweight view and lists them as credit top picks.

  Strengths

  They are quoted at 100.1 and 97.8, corresponding to yields to maturity of about 10.8% and 13.7%, respectively, and accumulated unpaid coupons raise potential recovery value.

  Weaknesses

  Investors are focused on potential equity financing, the handling of the 11 Skies contract, and the group's capital structure.

  Comparison

  Yields are higher than most investment-grade property bonds, but they come with significantly higher financing and execution risks.

  Risks

  Equity-financing dilution, worsening liquidity, continued coupon deferral, and asset disposals falling short of expectations.

• Longfor '29s

  One of J.P. Morgan's credit top picks.

  Strengths

  Quoted at 84.6, corresponding to a yield to maturity of about 9.8%, offering potential for higher coupon returns.

  Weaknesses

  Still affected by Mainland property sales and the financing environment for private developers.

  Comparison

  Compared with New World Development perpetuals, its yield is lower, but its capital structure and maturity profile are different.

  Risks

  Sales decline, worsening refinancing environment, and widening credit spreads.

• Vanke

  The appointment of the new chairman is viewed as helping maintain liquidity support from Shenzhen Metro and manage debt maturity risk.

  Strengths

  The new chairman has a state-owned enterprise and government background, and Fitch upgraded its rating to CC after the completion of an onshore bond extension.

  Weaknesses

  The rating remains highly speculative, and debt maturity and liquidity pressures have not been eliminated.

  Comparison

  Compared with financially stronger state-owned developers, Vanke is more dependent on external support and debt extensions.

  Risks

  Insufficient support, failed extension execution, and continued deterioration in sales and cash flow.

Key data

• Real-time secondary transactions in nine Mainland citiesUp 5% year on yearPrevious reading was up 6%.
• Real-time secondary transactions in Mainland first-tier citiesUp 7% year on yearPrevious reading was also up 7%; Shenzhen rose 31% year on year.
• Primary online registrations in sixty Mainland citiesUp 1% year on yearPrevious reading was down 6% year on year.
• Secondary online registrations in twelve Mainland citiesUp 12% year on yearPrevious reading was up 9%.
• First-tier city viewing index21Previous reading was 22, still in the 20 to 40 recovery range.
• Broker manager confidence index52Previous reading was 53; Guangzhou fell from 52 to 47, while Shenzhen rose from 57 to 62.
• Centaline listing price index for first-tier cities15.5Previous reading was 15.9, at a historical low.
• Secondary-home listings in ten Mainland citiesDown 0.1% month on monthDown about 5% cumulatively from the March peak.
• Sell-through rate for the third batch of Garden Regency51%A total of 68 units, priced at HK$13.6K psf, 1% higher than the previous batch and 18% higher than secondary homes.
• Sell-through rate for the second batch of La Mirabelle II16%A total of 135 units, priced at HK$15.8K psf, the same as the previous batch's average price and 5% lower than secondary homes.
• Secondary transactions in major Hong Kong estates39 unitsDown 11% month on month and 15% year on year.
• Hong Kong secondary home price indexDown 0.4% week on weekUp 11% year to date, already reaching the full-year target range of 10% to 15%.
• Centaline Valuation Index59Down from 67 and below 60 for the first time since the fourth quarter of 2025.
• Hong Kong visitor arrivals in JulyDown 1% year on yearJune was up 7% year on year; this was the first year-on-year decline since March 2025.
• JACI China High Yield Property IndexUp 1.6% for the week and 8.7% year to dateThe China High Yield Index rose 0.6% for the week over the same period.

Impact & implications

Resilient Mainland transaction volumes and declining listings provide relative support for core state-owned developers and high-quality property management platforms, but persistently weak price indicators mean the sector's fundamentals have not yet entered a strong recovery. Hong Kong developers face near-term pressure from slowing new-project sales and peaking home-price momentum, while landlord companies with solid balance sheets and higher visibility on rental income may be more defensive. The credit market has outperformed the equity market, but highly leveraged issuers such as New World Development still require close assessment of financing, contract disposal, and coupon payment capacity.

Risks

• Mainland secondary transaction growth may fail to translate into home-price improvement, and the listing price index may remain at a low level.
• Sell-through of new projects in Hong Kong may continue to weaken, and developers may need to offer further discounts or extend sales cycles.
• Hong Kong home prices have risen 11% year to date, and leading valuation indicators have fallen below key thresholds, creating correction risk in the second half of 2026.
• Hong Kong visitor arrivals have turned to a year-on-year decline, which may drag on retail-property tenant sales and rental expectations.
• Property stocks' relative underperformance versus the broader market and declining market risk appetite may widen valuation discounts.
• New World Development faces risks related to equity financing, contract disposal, liquidity, and deferral of perpetual bond coupons.
• Although Vanke has seen marginal improvement in management and rating terms, its debt maturity risk remains high.
• Weekly data can be volatile, and real-time transactions lead official online registrations by several weeks, so single-week changes should not be viewed as a definitive trend.

What to watch

• Whether real-time transactions in nine Mainland cities and secondary online registrations in twelve cities can continue to maintain positive year-on-year growth.
• Whether the first-tier city viewing index can rise further from the low-level recovery range.
• Whether the decline in Mainland listings ultimately drives stabilization in listing prices and actual transaction prices.
• Sell-through rates, discount levels, and developer pricing strategies for subsequent new-project batches in Hong Kong.
• After the Centaline Valuation Index fell below 60, whether Hong Kong secondary home prices show a sustained decline.
• Whether the year-on-year decline in Hong Kong visitor arrivals continues and affects tenant sales at landlord companies.
• Potential equity financing by New World Development, 11 Skies contract arrangements, and progress on perpetual bond coupons.
• Shenzhen Metro's liquidity support for Vanke and the execution of subsequent debt extensions.
• Property sector performance relative to the HSI, changes in southbound holdings, and spreads on high-yield property bonds.