Mainland China and Hong Kong property markets Report Interpretation

Overview

This weekly monitor tracks housing transactions, prices, supply, equity performance and selected credit instruments across Mainland China and Hong Kong. Its central message is mixed: Mainland China secondary-market volumes and listings offer signs of stabilization, but price indicators remain weak; Hong Kong developers continue aggressive primary pricing despite moderating sales momentum and an expected slowdown in home-price gains.

Core views

Mainland China real-time secondary sales remained positive year-on-year. Sales across nine cities rose 8% year-on-year, accelerating from 5% previously, while tier-1 cities rose 9%, versus 7% previously. Shenzhen and Guangzhou led with increases of 21% and 15%, respectively. J.P. Morgan notes that these real-time sales measures lead official registrations by several weeks, making them an early indication of underlying activity. Official registrations were less robust: 60-city primary sales rose 2% year-on-year, down from 4% previously, and 12-city secondary registrations increased only 1%, compared with 12% previously. Leading indicators showed a partial recovery in demand but continued pressure on pricing. The tier-1 visitation index rose from 21 to 22; J.P. Morgan defines readings of 20-40 as a recovering market. The manager confidence index edged down from 52 to 51, with Shanghai falling from 49 to 44 while Guangzhou improved from 47 to 51. At the same time, the Centaline tier-1 asking-price index slipped from 15.5 to 15.3, a historical low, and the Iceberg listing-price index fell 0.1% week-on-week. Inventory was more constructive: secondary listings declined 0.7% week-on-week across 10 cities and 0.3% in tier-1 cities, led by Guangzhou and Shenzhen. Listings have fallen about 5% since the March peak, which the report links to potential home-price stabilization. Hong Kong's primary market remained aggressively priced despite moderating sell-through. Wheelock's Park Silicon Phase 2 launched at HK$17,700 per square foot, 16% above the secondary market. SHKP raised prices on remaining Garden Regency units by 2-4% and planned a fourth batch at HK$14,000 per square foot, 3% above the prior batch and 21% above secondary prices. The report characterizes this as continued aggressive developer pricing. In the secondary market, transactions in the top 35 estates were flat week-on-week at 39 units and down 37% year-on-year; weekend appointments at the top 15 estates rose 0.2% week-on-week and 4% year-on-year. The home-price index fell 0.1% week-on-week and stayed in the 159-160 range since June. Prices were up 11% year-to-date, already within J.P. Morgan's 10-15% full-year target range, and the institution expects momentum to slow in 2H26. The Centaline Valuation Index rebounded sharply from 59 to 73, while tourist arrivals rose 38% year-on-year and 14% week-on-week, partly aided by a weather-affected low base a year earlier. Equity performance diverged across the two markets. Mainland China property shares fell 0.4% for the week versus a 0.3% decline in the Hang Seng Index; Country Garden gained 13% and Shimao 8%, while Greentown Service, Longfor, C&D International and Country Garden Services each fell 3%. Hong Kong property and conglomerate shares rose 1% against a 0.3% Hang Seng decline, led by Wharf REIC, up 24% following an unexpected dividend-policy change, and Wharf Holdings, up 10%; SHKP fell 5% on negative read-through from a potential offshore insurance tax for Mainland Chinese residents. J.P. Morgan's stated equity top picks are COLI, China Resources Land, China Jinmao and China Resources Mixc in Mainland China; and Swire Properties, Wharf REIC, Link REIT, Hongkong Land, CK Hutchison and Jardine Matheson in Hong Kong. In credit, the JACI China HY Property Index rose 2.2% during the week, outperforming China high yield's 1.1% gain and bringing year-to-date returns to 11%. Greentown China warned that 1H26 net profit could fall to RMB50-100 million from RMB210 million in 1H25 because of lower revenue from lower selling prices and area sold, lower gross margin and impairment losses. J.P. Morgan nevertheless views its credit profile as comfortable because cash-to-short-term debt exceeds 2x, short-term debt is under 25% of total debt, and the company is 25%-owned by and consolidated into China Communications Construction Group. The institution remains Neutral on GRNCH '28s at a 101.4 offer and 7.4% yield to maturity, citing fair valuation. Its named credit top picks are New World Development's 10.131% perpetual at a 101.8 offer and 10.6% yield to maturity, its 12.179% perpetual at a 99 offer and 13.6% yield to maturity, and Longfor '29s at an 85.8 offer and 9.3% yield to maturity.

Analysis framework

J.P. Morgan combines weekly real-time and official housing sales data with viewing volumes, manager surveys, listing prices and inventory to assess property-market direction. It then links market conditions to primary-launch pricing, secondary-market activity, tourist flows, sector share-price moves, southbound holdings, equity valuation metrics and bond-level yields, spreads and credit views.

Methodology notes

• Industry AnalysisSupply-demand framework

  Housing supply-demand monitoring through sales, viewings, listings and prices

  The report treats sales and visitation as demand indicators and secondary listings as supply. Falling listings alongside positive sales are used as evidence consistent with price stabilization, while weak listing-price indicators show that stabilization is not yet a broad price recovery.

• Valuation methodsPB valuation

  Price-to-book and NAV-discount comparison

  The equity valuation tables compare developers, landlords, REITs and conglomerates using P/B and, where provided, discounts to NAV alongside earnings multiples and dividend yields.

• Fixed Income and CreditSpread and Asset-Quality Analysis

  Bond relative-value and issuer-credit assessment

  The credit section evaluates specific bonds using price, yield to maturity, Z-spread, duration and ratings, while judging issuer credit through liquidity, debt structure, profitability and balance-sheet support.

Asset mapping & comparison

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

• China Overseas Land (0688.HK)

  J.P. Morgan mainland China equity top pick

  Strengths

  Included among the institution's stated top picks.

• China Resources Land (1109.HK)

  J.P. Morgan mainland China equity top pick

  Strengths

  Included among the institution's stated top picks.

• China Jinmao (0817.HK)

  J.P. Morgan mainland China equity top pick

  Strengths

  Included among the institution's stated top picks.

• China Resources Mixc Lifestyle Services (1209.HK)

  J.P. Morgan mainland China property-management top pick

  Strengths

  Included among the institution's stated top picks.

• Wharf REIC (1997.HK)

  J.P. Morgan Hong Kong equity top pick

  Strengths

  Share price rose 24% during the week following an unexpected dividend-policy change.

• Swire Properties (1972.HK)

  J.P. Morgan Hong Kong developer/landlord top pick

  Strengths

  Included among the institution's stated top picks.

• Link REIT (0823.HK)

  J.P. Morgan Hong Kong developer/landlord top pick

  Strengths

  Included among the institution's stated top picks.

• Longfor '29

  J.P. Morgan credit top pick

  Strengths

  Quoted at an 85.8 offer with a 9.3% yield to maturity; rated Overweight in the credit table.

• Greentown China GRNCH '28

  Credit instrument assessed as Neutral

  Strengths

  J.P. Morgan cites cash-to-short-term debt above 2x, short-term debt below 25% of total debt and SOE-linked balance-sheet support.

  Weaknesses

  Expected 1H26 profit decline reflects lower revenue, lower gross margin and impairment losses.

  Comparison

  Neutral at a 101.4 offer and 7.4% yield to maturity because valuation is considered fair.

  Risks

  Lower selling prices and area sold, margin pressure and impairment losses.

Key data

• Mainland China 9-city real-time secondary sales+8% Y/YUp from +5% previously; tier-1 cities were +9% Y/Y.
• Mainland China 60-city primary registrations+2% Y/YDown from +4% previously.
• Mainland China 10-city secondary listings-0.7% W/WAbout 5% below the March peak.
• Hong Kong home-price index-0.1% W/W; +11% YTDThe report says the index has remained in the 159-160 range since June.
• Hong Kong top-35-estate transactions39 unitsFlat week-on-week and down 37% year-on-year.
• JACI China HY Property Index+2.2% for the week; +11% YTDOutperformed China HY's +1.1% weekly gain.
• Greentown China 1H26 expected net profitRMB50-100 millionVersus RMB210 million in 1H25.

Impact & implications

The report presents declining Mainland China listings and positive real-time secondary sales as early stabilization signals, but weak asking-price and listing-price readings temper that conclusion. In Hong Kong, aggressive primary-launch pricing contrasts with softer secondary activity; having reached the institution's full-year price target range, home-price gains are expected to decelerate in 2H26. Credit performance remains stronger than the uneven property fundamentals, with selective issuer views based on liquidity and relative valuation.

Risks

• Greentown China's expected 1H26 profit decline is driven by lower selling prices and area sold, lower gross margin and impairment losses.
• Hong Kong home-price momentum is expected to slow in 2H26 after prices reached J.P. Morgan's full-year target range.
• Mainland China price indicators remain weak despite improving secondary-sales and inventory signals.

What to watch

• Whether Mainland China real-time sales strength translates into official primary and secondary sales registrations.
• Tier-1 city visitation, manager confidence, asking-price indices and the pace of secondary-listing reductions.
• Hong Kong primary-project sell-through and the gap between new-launch prices and secondary-market prices.
• Hong Kong secondary transactions, home-price momentum and tourist-arrival trends.
• Greentown China's earnings, liquidity and debt-maturity profile, as well as China high-yield property bond performance.