China property volume cooled sequentially in Week 27, but pricing remained resilient
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China property volume cooled sequentially in Week 27, but pricing remained resilient
Goldman Sachs states that in Week 27, new-home and resale transaction volumes declined 10% and 12% sequentially, respectively, while growing 5% and 16% year-on-year, with pricing resilience, lower inventories, and strong state-owned developers' stock performance as the main support.
- New home sales area was down 10% week-on-week and up 5% year-on-year; year-to-date year-on-year is down 12%.
- Resale transaction area was down 12% week-on-week and up 16% year-on-year; year-to-date year-on-year is up 1%.
- Inventory balance declined 0.3% sequentially, down 5.1% from the end of 2025, with a months-of-supply pace of 27.0 months.
- Jinmao (0817.HK, Buy) rose 9% in Week 27, versus an average weekly rise of 4% for strong state-owned developers.
- Goldman Sachs-covered offshore and mainland developers traded at 2026E P/B of 0.5x and 0.4x, respectively, with valuations near the lower end of the down-cycle.
Report interpretation
Overview
This report is Goldman Sachs' Week 27 China property weekly wrap. The core conclusion is that while transaction volumes cooled sequentially, pricing remained firm. Both new-home and resale transactions declined on a sequential basis, but year-on-year momentum improved; agent price expectations continued to improve, new listing supply kept decelerating, and city average selling prices rose about 3% sequentially.
Core views
Goldman Sachs highlights three themes: first, demand-side transaction slowdown is short-term while year-on-year trend improved, with resale outperforming new homes; second, supply-side new listings and inventories continue to contract, helping support pricing resilience; third, developer valuations remain at depressed levels, and strong state-owned and offshore covered names outperformed on the week.
Analysis framework
The report tracks about 75 cities for new-home sales area, about 20 cities for resale sales, the Centaline Salesman Index, Centaline Seller Asking Index, months of inventory clearance, the GSPC completion tracker, and covered developer valuation tables, providing weekly monitoring across transactions, pricing, inventory, completions, and equity performance.
Methodology notes
Tracking primary and secondary sales area
It compares week-on-week, year-on-year, and year-to-date relative-to-historical-year performance of new-home sales in about 75 cities and resale sales in about 20 cities.
Centaline Salesman Index and Seller Asking Index
CSI reflects agents' expectations for price appreciation, while CAI reflects sellers' asking-price quotes; both are used to judge whether market pricing expectations are improving.
Goldman Sachs Property Completion tracker
Residential completion trends are inferred using the float glass supply-demand model and downstream demand signals; the report estimates completions in June 2026 to be down about 20% year-on-year and full-year 2026 down about 1% year-on-year.
Price-to-book and NAV discount
The report compares offshore and onshore developers' 2026E NAV discounts and 2026E P/B ratios, benchmarking against trough levels from previous down cycles in 2008, 2011, and 2014.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Jinmao (0817.HK)Covered name; one representative among strong state-owned developers
- Strengths
- Rated Buy, rose 9% in Week 27, outperforming the strong state-owned developer average weekly gain of 4%; the report sets a target price of HK$1.70 versus current price HK$1.40, implying about 24% upside.
- Weaknesses
- The valuation table shows a 2026E P/B around 0.6x, with earnings and valuation still constrained by the sector down-cycle.
- Comparison
- The average weekly gain of strong state-owned developers is about 4%, while POE developers are about 4% and other state-owned developers about 2%; Jinmao's weekly performance was stronger.
- Risks
- Property sales recovery may be weaker than expected, pricing expectations may weaken, and the financing environment or policy support may disappoint.
- China offshore property developer coverage basketIndustry basket
- Strengths
- Average basket stock performance rose 5% during the week, outperforming MSCI China’s 1%; valuation shows a 39% discount to 2026E NAV.
- Weaknesses
- The sector remains near cycle lows, with ongoing pressure on transaction and completion data.
- Comparison
- The offshore basket’s 2026E P/B is around 0.5x, below P/B levels at several historical down-cycle troughs.
- Risks
- Overseas financing conditions, U.S. dollar bond risks, sales liquidation, and policy implementation intensity.
- China mainland property developer coverage basketIndustry basket
- Strengths
- Average basket stock performance rose 2% during the week, outperforming CSI 300’s -2%.
- Weaknesses
- 2026E P/B is around 0.4x, indicating a large market discount to earnings and asset quality.
- Comparison
- The mainland basket’s 2026E NAV discount is 35%, close to the offshore basket’s 39% discount.
- Risks
- A-share risk appetite, durability of sales recovery, inventory clearance, and a slowdown in new starts.
Key data
- New home sales area-10% wow; +5% yoyAbout 75 cities, Week 27 performance.
- New home sales area YTD-12% yoyCompared with 2024 and 2023 levels, respectively -12% and -38%.
- Resale transaction area-12% wow; +16% yoyAbout 20 cities, Week 27 performance.
- Resale transaction area YTD+1% yoyCompared with 2024 and 2023 levels, respectively +18% and +11%.
- Inventory balance-0.3% wow; -5.1% versus end-2025Tracked across about 20 cities.
- Months of inventory to clear27.0 monthsAverage was 27.5 months in June.
- GSPC completion signalJune 2026 about -20% yoy; 2026E about -1% yoyBased on Goldman Sachs float glass supply-demand model.
- Jinmao stock performance+9% wow0817.HK, rated Buy, outperformed the average strong state-owned developers during the week.
- Offshore covered developer valuation39% discount to 2026E NAV; 2026E P/B of 0.5xThe report says this is near trough levels in the down cycle.
- Mainland covered developer valuation35% discount to 2026E NAV; 2026E P/B of 0.4xUsed for comparison with historical cycle troughs.
Impact & implications
The short-term sequential slowdown in transaction volume suggests demand recovery remains uneven, but improving year-on-year figures, declining inventories, and marginal improvement in pricing expectations indicate the market has not deteriorated materially. For equities, stronger state-owned developers may benefit more due to higher sensitivity to balance-sheet and policy factors, and valuation bottoms may amplify stock leverage to incremental fundamental improvement.
Risks
- Sequential volume deceleration may persist, making year-on-year improvement hard to sustain.
- CAI fell 0.4 percentage points sequentially and 5.4 percentage points year-on-year, suggesting seller-side pricing expectations have not improved in tandem.
- GSPC shows June 2026 completions down about 20% year-on-year, and new starts may also see a high-twenty-percentage-point year-on-year drop, indicating continued pressure on downstream demand.
- Low developer valuations may reflect asset quality, cash flow, and sector credit risks, not just undervaluation.
- The report contains Goldman Sachs standard disclosures; investors should note that ratings, target prices, and research views can change.
What to watch
- Whether new-home and resale transaction volumes in coming weeks can recover to sequential growth on the back of improved year-on-year momentum.
- Whether CSI and CAI improve in tandem, especially whether seller-side asking expectations can stabilize.
- Whether inventory balances and months to clear continue to decline.
- How well the GSPC tracker aligns with NBS completion and new-start data.
- Whether price divergence between strong state-owned developers, POE developers, and other state-owned developers continues.
- Marginal changes in policy support, financing conditions, and household home-buying sentiment.