MS Real Estate Weekly: New Home Sales Turn Negative YoY, Secondary Market Still Up 4%

Overview

This is Morgan Stanley's China Real Estate Weekly Database Tracker Report (Issue #24), primarily updating high-frequency data such as new and secondary home transactions, sell-through rates, and asking price indices for the week ended June 14, 2026. The core conclusion indicates divergent performance in the real estate market: new home sales momentum cooled significantly compared to the previous week, turning negative year-on-year; while the secondary market growth slowed, it remained positive. The firm maintains a neutral 'In-Line' (Market Perform) rating for the Asia-Pacific real estate sector.

Core views

New home sales turned negative YoY, with clear divergence across city tiers. For the week ended June 14, registered new home sales in 50 key cities declined 1% YoY, compared to a 21% YoY increase in the previous week, marking a significant sequential pullback. From a YTD cumulative perspective, new home sales in these 50 cities are still down 12% YoY. By city tier, new home weekly sales in Tier-1 cities fell 9% YoY (previous +3%); Tier-2 cities grew 2% YoY (previous +25%); and Tier-3 cities fell 4% YoY (previous +27%). This indicates substantial recent volatility in the new home market, with Tier-1 and Tier-3 cities facing greater sales pressure at this juncture. The secondary home market remains resilient but growth has slowed. Registered secondary home sales in 10 sample cities grew 4% YoY during the week, lower than the 23% increase in the previous week, but YTD cumulative sales still achieved a 6% positive growth. Among them, Tier-1 cities saw a 3% YoY increase in secondary home weekly sales (previous +34%), and Tier-2 cities saw a 3% YoY increase (previous +17%). Compared to new homes, the secondary market demonstrates stronger stability on a YoY basis. Sell-through rates dropped sharply, and price expectations weakened marginally. The overall sell-through rate last week was 48%, a significant decrease from 100% in the previous week. Specifically, the sell-through rate in Tier-1 cities was 45% (previous 100%), and in Tier-2 cities it was 51% (previous 0%). Regarding price indicators, the Centaline Six-City Secondary Home Asking Price Tracking Index slightly decreased to 17.4% (previous 17.5%), and the Tier-1 City Real Estate Agent Index dropped to 53.2 (previous 54.4), reflecting a slight cooling in seller price expectations and agent confidence.

Analysis framework

This report adopts a typical high-frequency data tracking method, capturing short-term market trends by monitoring weekly online signing registration volumes for new homes in 50 cities and secondary homes in 10 cities. Analytically, the firm focuses on year-on-year (YoY) changes to eliminate seasonal factors, combined with a four-week moving average to smooth out single-week fluctuations. It also breaks down data by Tier-1, Tier-2, and Tier-3 cities to identify structural differences. Additionally, sell-through rates and the Centaline Asking Price Index are introduced as auxiliary verification indicators for supply-demand dynamics and market sentiment, thereby forming a comprehensive judgment on real estate market prosperity.

Methodology notes

• Industry/Sector Analysis FrameworkVolume-Price Breakdown

  Breaking down the real estate market into two dimensions for separate tracking: transaction volume (new/secondary home units sold) and price (asking price index/agent index).

  In the real estate cycle, 'volume' is typically a leading indicator for 'price'. By simultaneously monitoring sales volume and asking price indices, the report aims to determine whether the current market is in a phase of 'rising volume and prices', 'falling volume with stable prices', or 'falling volume and prices', helping investors identify cyclical turning points.

• Industry/Sector Analysis Framework

  City Tier Stratified Analysis (Tier 1/2/3 Cities Breakdown).

  The Chinese real estate market exhibits strong regional heterogeneity. The report categorizes sample cities into Tier-1, Tier-2, and Tier-3 for statistical analysis because cities of different tiers have completely different population inflows, inventory levels, and policy sensitivities. Stratified data avoids aggregate figures masking local risks or opportunities.

Key data

• 50-City New Home Weekly Sales YoY-1%Previous value was +21%, YoY growth turned from positive to negative
• 50-City New Home YTD Sales YoY-12%Cumulative sales remain in negative growth territory
• 10-City Secondary Home Weekly Sales YoY+4%Previous value was +23%, growth slowed but remained positive
• Overall Sell-through Rate48%Previous value was 100%, significant sequential drop
• Centaline Six-City Secondary Home Asking Price Index17.4%Previous value was 17.5%, marginal decrease
• Tier-1 City Real Estate Agent Index53.2Previous value was 54.4, reflecting a slight decline in agent confidence

Impact & implications

The report believes the current real estate market exhibits characteristics of 'weak new homes, stable secondary homes', with obvious rotation features across city tiers. The rapid pullback in new home sales and the sharp drop in sell-through rates suggest uncertainty in developers' launch schedules or buyers' willingness to enter the market in the short term. For covered property developers, this volatility in high-frequency data implies that the fundamental recovery process is not linearly upward, requiring continuous monitoring of subsequent weekly data to confirm whether this is a short-term disturbance or a trend of weakening.

What to watch

• Year-on-year change trends in weekly new and secondary home registered sales
• Sustained performance of sell-through rates across city tiers
• Marginal directional changes in the Centaline Asking Price Index and Agent Index