China real estate weekly transactions improved at the margin, but year-to-date remains under pressure

Overview

This report is Morgan Stanley's weekly database tracking of China's real estate sector, focusing on high-frequency indicators including primary home sales, secondary home sales, sell-through rates, and secondary home asking prices. The report shows that, for the week ending April 19, 2026, both primary and secondary home transactions improved year over year, but cumulative sales still indicate an unstable foundation for sector recovery.

Core views

Marginal improvement in weekly transactions is the core signal of this period: weekly primary home sales in 50 cities rose 9% YoY, and weekly secondary home sales in 10 cities rose 19% YoY. However, year-to-date primary home sales are still down 18% YoY, while year-to-date secondary home sales are down only 2% YoY, indicating the secondary market is relatively more stable while the new home market remains under significant pressure. The industry view remains In-Line, implying a relatively neutral expectation for performance versus the broader market.

Analysis framework

The report uses a high-frequency database tracking framework, breaking down primary and secondary home transactions by city tier and combining sell-through rates, asking price indices, and historical moving average trends to assess real estate market conditions. The charts show primary home sales in 50 cities and their 4-week moving average, reflecting overall volume fluctuations from 2019 to April 2026 and a relatively low range in recent years.

Methodology notes

• High-frequency data trackingWeekly primary home transaction tracking

  Weekly primary home sales in 50 cities and 4-week moving average

  Observes short-term changes in new home market conditions through weekly transaction units for primary homes across 50 cities and their 4-week moving average.

• High-frequency data trackingWeekly secondary home transaction tracking

  Weekly secondary home sales in 10 cities

  Tracks the activity level of the existing-home market through year-over-year changes in secondary home transactions across 10 cities, providing a comparison with primary homes.

• Sales efficiency indicatorSell-through rate

  sell-through rate

  Measures the absorption of newly launched housing supply through the relationship between weekly sales and supply; the total sell-through rate this period was 49%.

• Price trackingCentaline six-city secondary home asking price tracking index

  secondary asking price tracking index

  Used to track changes in secondary home asking prices; this period it was 18.8%, slightly down from 18.9% the previous week.

Asset mapping & comparison

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

• China real estate sector

  Core coverage object of the report

  Strengths

  Weekly transaction growth turned positive year over year, secondary home transactions were relatively stable, and sell-through rates improved from the previous week.

  Weaknesses

  Year-to-date primary home sales are still down 18% YoY, tier-3 cities remain at -15% YoY, and the overall recovery is uneven.

  Comparison

  Year-to-date secondary home sales at -2% YoY are clearly better than primary home sales at -18% YoY, showing stronger resilience in the existing-home market.

  Risks

  Unsustained policy effects, insufficient homebuyer confidence, developer funding pressure, and downward pressure on prices.

• Covered developer stock universe

  Relevant listed companies shown in the industry disclosure table

  Strengths

  Some companies are rated Overweight, including C&D International Investment Group Ltd, China Resources Land Ltd., Seazen Group Ltd, Seazen Holdings Company Ltd., and Yuexiu Property Co Ltd.

  Weaknesses

  Some companies are rated Underweight, including China Vanke Company Ltd. (000002.SZ), Gemdale Corporation, and Greentown China Holdings.

  Comparison

  The rating distribution shows clear divergence within the research coverage, with differing relative performance expectations for high-quality developers versus more pressured developers.

  Risks

  Differences in company-level financing, sales, balance sheets, and policy execution may lead to performance divergence.

Key data

• Weekly primary home sales in 50 cities+9% YoYThe previous week was -8% YoY; year-to-date is -18% YoY.
• Primary home sales in tier-1 cities+2% YoYThe previous week was also +2% YoY.
• Primary home sales in tier-2 cities+20% YoYThe previous week was -9% YoY, showing the most significant improvement.
• Primary home sales in tier-3 cities-15% YoYThe previous week was also -15% YoY, remaining weak.
• Weekly secondary home sales in 10 cities+19% YoYThe previous week was -6% YoY; year-to-date is -2% YoY.
• Overall sell-through rate49%The previous week was 33%; the tier-2 city sell-through rate was 49%, versus 19% the previous week.
• Centaline six-city secondary home asking price tracking index18.8%The previous week was 18.9%.
• Industry viewIn-LineMorgan Stanley's 12-18 month relative performance view on China's real estate sector is neutral.

Impact & implications

This week's data provides marginal support for sector sentiment, especially as both primary and secondary home transactions either turned positive or improved meaningfully; however, cumulative new home sales remain deeply negative, indicating that demand recovery still requires sustained validation. If improvements in tier-2 city transactions and sell-through rates can continue, this may help ease developers' cash flow pressure; if it is only weekly volatility, it will be difficult to change the sector's neutral view.

Risks

• The improvement in weekly transactions may be only short-term volatility and may not represent a trend recovery.
• Year-to-date primary home sales are still down 18% YoY, indicating that demand for new homes remains weak.
• Primary home sales in tier-3 cities fell 15% YoY, and pressure in lower-tier cities persists.
• The asking price index edged down, and price expectations may continue to suppress homebuying demand.
• Morgan Stanley discloses investment banking or service relationships with multiple covered companies, and investors should be aware of potential conflicts of interest.

What to watch

• Whether year-over-year primary home sales in 50 cities and the 4-week moving average continue to improve over the coming weeks.
• Whether secondary home transactions in 10 cities can maintain positive growth, and whether year-to-date growth can turn positive.
• Whether the improvement in tier-2 city sell-through rates continues and spreads to tier-1 and tier-3 cities.
• Whether the Centaline six-city secondary home asking price index continues to decline.
• Whether divergence in ratings and price performance among key developers widens.