China property market: China property volumes weakened sharply in Week 39 as Beijing and Shanghai clarified August reform implementation
Goldman Sachs reports a 14% week-on-week decline in primary sales and a 39% decline in secondary transactions, alongside weaker search, subscription, and visitation indicators. The report also details policy measures intended to manage developers' funding, land payments, and the transition toward completed-home sales.
Summary
Goldman Sachs reports a 14% week-on-week decline in primary sales and a 39% decline in secondary transactions, alongside weaker search, subscription, and visitation indicators. The report also details policy measures intended to manage developers' funding, land payments, and the transition toward completed-home sales.
- New-home sales volume fell 14% week on week and 35% year on year across about 75 cities.
- Secondary transaction volume dropped 39% week on week and 30% year on year across about 20 cities.
- Beijing and Shanghai issued city-level implementation rules for the August 28 reforms, including land-payment schedules, deposit caps, presale eligibility, and mortgage-proceeds restrictions.
- Goldman Sachs' completion tracker implies a high-twenties year-on-year decline in September completions and a 15% decline for FY26E.
- Offshore and onshore covered developers trade at average 40% and 14% discounts to end-2026E NAV, respectively.
Report Interpretation
Overview
This China Property Weekly Wrap reviews Week 39 transaction trends, forward indicators, inventory, construction activity, policy implementation in Beijing and Shanghai, and listed-developer valuations. Goldman Sachs depicts weakening near-term property activity, set against regulatory measures intended to support construction-linked financing and clarify the transition in sales models.
Core views
Beijing and Shanghai issued implementing rules on September 24 and 28, respectively, for the August 28 property reforms. For residential land offered after August 28, at least 50% of land consideration must be paid within 30 days of signing; the remaining balance is due within two years in Beijing and one year in Shanghai, with a further one-year extension possible in Shanghai subject to approvals. Installments are interest-free in both cities. Completed-home-sale projects may collect reservation deposits after construction permits are obtained, generally capped at 1% of home price in Beijing and 3% in Shanghai. The rules also clarify the treatment of projects under the presale transition. Projects with full or partial construction-planning permits but no presale permits may continue under prior presale and escrow rules. Projects without planning permits but with land acquired or being acquired should in principle adopt completed-property sales; however, they may apply to use the presale model before end-2027E if they guarantee completion and delivery, meet local transition requirements, and accept tighter escrow controls. For projects obtaining presale permits after August 28, mortgage proceeds, including housing provident fund loans, can be received only after completion filing. Both cities reiterated that developer-loan disbursement should track construction progress, while Shanghai additionally highlighted project-based financing support through bonds, equities, ABS, and REITs. Separately, the Ministry of Natural Resources said on September 22 that policy focus is shifting from new land supply toward revitalizing existing land and capturing long-term operating returns, including linking urban land quotas to population growth and allowing greater planning, land-use, and land-payment flexibility. Market indicators weakened in Week 39. Primary transaction volumes fell 14% week on week, while new-home search activity declined 2.9%. New-home gross floor area sold was down 14% week on week and 35% year on year across roughly 75 cities. Secondary transaction volume contracted 39% week on week and 30% year on year across roughly 20 cities; secondary subscription sales, which lead registration-based sales by one to two weeks, fell 18%, and secondary visitation fell 12%. September month-to-date primary GFA sold was up 6% month on month but down 10% year on year on the median, while secondary GFA sold was down 4% month on month and 1% year on year. Year to date, primary GFA sold averaged down 11% year on year, 17% below 2024 and 37% below 2023; secondary GFA sold averaged up 1% year on year and was 13% and 14% above 2024 and 2023, respectively. There were limited offsets in the secondary market. New listing supply among monitored cities fell 22% week on week, more sharply than the seasonal pattern observed in September of the prior year. Agents' price-appreciation expectations improved, with the Centaline Salesman Index up 2.1 percentage points week on week and 3.0 points year on year in four cities; an index reading above 50 indicates positive expectations for price increases. However, seller sentiment softened: the Centaline Seller Asking Index, which tracks quoted prices, fell 0.3 percentage points week on week and 5.5 points year on year in six cities. Inventory increased 0.2% week on week, though it remained 7.4% below end-2025 levels. Inventory months stood at 27.6, compared with averages of 27.1 in July and 27.2 in August 2026. Goldman Sachs also expects the demand and construction backdrop to remain weak: property sales in about 75 cities imply that top-100 developers' September contract sales may decline 13% year on year, versus a 4% decline in August. Its GSPC tracker indicates a high-twenties percentage year-on-year decline in September completions and a 15% decline for FY26E. The tracker is based on downstream supply-demand signals from the firm's China float-glass outlook and proprietary weekly float-glass demand model. New starts are also expected to decline by a high-twenties percentage in September, based on land-sales trends in 300 cities and the nationwide cement-shipment ratio. For BEKE, Goldman Sachs estimates gross transaction value across new and existing homes could rise 6% year on year for July through September month to date, consisting of an 8% decline in new-home GTV and an 11% increase in existing-home GTV. This is above the internet team's 3Q26E estimate of 1% year-on-year growth, with flat new-home and 1% existing-home growth. Developer share-price performance favored stronger SOEs in Week 39. Covered stronger SOE developers gained 1% on average, with COLI up 4% and Jinmao up 2%, while other developers fell 1% on average. Offshore coverage was flat, versus a 2% decline for MSCI China, and onshore coverage fell 1%, versus a 4% decline for the CSI 300. Goldman Sachs characterizes valuations as near downturn trough conditions: offshore coverage trades at an average 40% discount to end-2026E NAV and 0.4x 2026E P/B, compared with historical trough discount/P-B combinations of 39%/0.7x in 2H2008, 73%/0.9x in 2H2011, and 58%/0.9x in 1H2014. Onshore coverage trades at a 14% average NAV discount and 0.5x 2026E P/B, versus 67%/1.6x, 64%/1.5x, and 61%/1.2x at those respective troughs.
Analysis framework
Goldman Sachs combines weekly primary- and secondary-market transaction data, search, subscription, visitation, listing, inventory, and sentiment indicators with policy-document analysis. It uses land-sales and cement-shipment trends to assess new starts, and a proprietary float-glass supply-demand model to infer housing completions. Developer valuations are compared using estimated end-2026 NAV discounts and 2026E P/B multiples against prior downturn troughs.
Methodology notes
Property completion tracking based on a float-glass supply-demand model and downstream construction signals.
The report uses float-glass demand and supply indicators as a proxy for construction activity to estimate monthly property completions.
Weekly monitoring of transaction volumes, search activity, subscriptions, visitation, listings, inventory, and price expectations.
The report separates sales-volume changes from demand-leading indicators and price-expectation measures to assess property-market momentum.
Comparison of developer share prices with estimated end-2026 net asset value and historical trough discounts.
NAV discounts are used to show how far listed developers trade below estimated asset value relative to prior downturns.
Comparison of 2026E price-to-book multiples with historical downturn troughs.
P/B multiples provide a second valuation reference for offshore and onshore developer coverage.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- China Overseas Land & Investment (0688.HK)Covered stronger SOE developer; outperformed in Week 39 and is rated Buy.
- Strengths
- Share price rose 4% week on week, outperforming the covered stronger-SOE group.
- Comparison
- Outperformed the stronger SOE developer average gain of 1%.
- China Jinmao (0817.HK)Covered stronger SOE developer; outperformed in Week 39 and is rated Buy.
- Strengths
- Share price rose 2% week on week.
- Comparison
- Outperformed the stronger SOE developer average gain of 1%.
- China Resources Land (1109.HK)Covered stronger SOE developer.
- Strengths
- Rated Buy in the valuation comparison table.
- Comparison
- Part of the stronger SOE developer group.
- Greentown China (3900.HK)Covered mixed-ownership developer.
- Strengths
- Rated Buy in the valuation comparison table.
- Comparison
- Classified as mixed ownership.
- Longfor Group (0960.HK)Covered private developer.
- Weaknesses
- Rated Neutral in the valuation comparison table.
- Comparison
- Included among other developers, whose shares fell 1% on average in Week 39.
- Seazen Group (1030.HK)Covered private developer.
- Weaknesses
- Rated Sell in the valuation comparison table.
- Comparison
- Included among other developers.
- Vanke A (000002.SZ) and Vanke H (2202.HK)Covered mixed-ownership developers.
- Weaknesses
- Both are rated Sell in the valuation comparison table.
- Comparison
- Included among other developers.
Key data
- Week 39 primary GFA sold-14% WoW; -35% YoYAcross about 75 cities.
- Week 39 secondary GFA sold-39% WoW; -30% YoYAcross about 20 cities.
- September MTD primary GFA sold+6% MoM; -10% YoYMedian performance.
- YTD primary GFA sold-11% YoYAlso 17% below 2024 and 37% below 2023.
- Inventory months27.6Versus 27.1 in July and 27.2 in August 2026.
- September top-100 developer contract sales indication-13% YoYCompared with -4% in August.
- September 2026 completions indicationHigh-twenties % YoY declineGSPC tracker; FY26E is -15% YoY.
- Offshore developer valuation40% discount to end-2026E NAV; 0.4x 2026E P/BCoverage average.
- Onshore developer valuation14% discount to end-2026E NAV; 0.5x 2026E P/BCoverage average.
Impact & implications
The report's near-term reading is that sales, leading demand measures, and construction activity remain weak. The Beijing and Shanghai rules provide more operational detail on land payments, presales, escrow, mortgage-proceeds timing, and construction-linked financing, while valuation comparisons show listed developer coverage trading at low P/B multiples and substantial NAV discounts.
What to watch
- Primary and secondary transaction volumes, searches, subscriptions, visitation, and new listings in coming weeks.
- Whether top-100 developers' September contract sales decline by the indicated 13% year on year.
- September completions and new-start data relative to Goldman Sachs' high-twenties percentage decline indications.
- Implementation of Beijing and Shanghai rules on presales, escrow, mortgage-proceeds withdrawal, and project financing.