Weekly divergence in China property sales: primary sales weakened year over year, while secondary transactions continued to grow

Overview

This report is Morgan Stanley's 30th weekly database tracker on the China property sector, focusing on primary and secondary home registered sales, sell-through rates, the secondary-home listing price index, and property broker activity indicators. The report covers China Property, is framed geographically as Asia Pacific, and centers on residential market data in major Chinese cities.

Core views

The report's core conclusion is neutral and mixed: primary-home sales weakened on a weekly year-over-year basis, with 50-city data shifting from 3% growth year over year in the previous week to a 4% decline, indicating that the new-home market remains under pressure; secondary-home sales maintained positive growth but with a slight slowdown, rising 5% year over year in 10 cities; the sell-through rate improved significantly to 50%, though its sustainability needs to be monitored. The disclosed industry view is In-Line, indicating that the analysts expect the covered China property sector to perform broadly in line with the relevant benchmark over the next 12-18 months.

Analysis framework

The report uses a high-frequency weekly database tracking approach, comparing year-over-year changes, week-over-week changes versus the prior week, and year-to-date performance in registered primary and secondary home transactions, while also breaking down performance by city tier across tier-1, tier-2, and tier-3 cities. It also incorporates sell-through rates, the secondary-home listing price index, and the property broker index to assess sales momentum, inventory absorption, and price expectations.

Methodology notes

• High-frequency industry trackingWeekly Database Tracker

  Weekly sales and sell-through monitoring

  Tracks changes in property fundamentals through weekly registered transactions, year-over-year changes, year-to-date year-over-year performance, and sell-through rates, making it suitable for capturing short-term sales momentum.

• City-tier analysisCity-tier breakdown

  Comparison across tier-1, tier-2, and tier-3 cities

  The report separately discloses primary and secondary sales performance by city tier to identify differences across regions and city levels.

• Price and sentiment indicatorsCentaline six-city secondary-home listing price tracking index and tier-1 city property broker index

  Observing price expectations and transaction activity

  The listing price index and broker index are used to help assess secondary-home price pressure, market activity, and transaction confidence.

Asset mapping & comparison

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

• China property sector

  Sector covered by the report

  Strengths

  Secondary-home transactions maintained year-over-year growth, the overall sell-through rate improved from the prior week, and primary-home sales in some tier-1 and tier-3 cities turned positive year over year.

  Weaknesses

  Primary-home sales in 50 cities declined year over year and remain down 11% year to date, while primary-home sales in tier-2 cities weakened notably.

  Comparison

  The industry view is In-Line, implying broadly benchmark-like expected performance relative to the relevant regional benchmark.

  Risks

  Unsustained sales recovery, increasing price pressure, policy effects falling short of expectations, and pressure on developer financing and delivery.

• Covered basket of listed Chinese property developers

  Industry coverage stock universe disclosed in the report

  Strengths

  Covers multiple Hong Kong-listed and A-share developers, facilitating cross-sectional comparison of ratings, prices, and industry exposure.

  Weaknesses

  The report is primarily a weekly database tracker rather than a deep valuation update on each company.

  Comparison

  Disclosed stock ratings include Overweight, Equal-weight, Underweight, and other elements of Morgan Stanley's relative rating system.

  Risks

  Individual stock ratings may change with the latest research; company-level differences in liquidity, sales, and policy sensitivity are significant.

Key data

• Weekly primary-home registrations in 50 cities同比-4%For the week ended July 26, 2026; the previous week was同比+3%; year to date同比-11%.
• Primary-home sales in tier-1 cities同比+13%The previous week was同比-20%.
• Primary-home sales in tier-2 cities同比-11%The previous week was同比+14%.
• Primary-home sales in tier-3 cities同比+9%The previous week was同比-1%.
• Weekly secondary-home registrations in 10 cities同比+5%The previous week was同比+6%; year to date同比+4%.
• Secondary-home sales in tier-1 cities同比+6%The previous week was同比+9%.
• Secondary-home sales in tier-2 cities同比+4%The previous week was同比+5%.
• Overall sell-through rate50%The previous week was 26%; tier-1 cities were at 52%, and tier-2 cities at 49%.
• Centaline six-city secondary-home listing price tracking index16.0%The previous week was 16.5%.
• Tier-1 city property broker index53.3The previous week was 52.8.

Impact & implications

For investors, the report indicates that China's property sector remains in an uneven stage of fundamental recovery. Continued year-over-year growth in secondary-home transactions and an improved sell-through rate support market activity; however, primary-home sales are still down by a double-digit rate year to date, and weekly new-home sales in tier-2 cities have weakened, suggesting that pressure on developers' sales and cash flow has not been fully alleviated. The In-Line industry view implies a relatively neutral positioning, and investors should continue to watch policy support, the sustainability of sales, price pressure, and improvements in developers' balance sheets.

Risks

• Continued declines in primary-home sales could drag on developers' cash collections and earnings expectations.
• A slowdown in secondary-home transaction growth or greater pressure on listing prices could weaken market confidence.
• The improvement in the sell-through rate may be affected by short-term supply or project mix factors, and its sustainability still needs verification.
• The intensity of policy support, implementation pace, or homebuyer confidence may come in below expectations.
• The report discloses that Morgan Stanley has investment banking or other service relationships with some 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 improve again in the coming weeks.
• Whether year-over-year secondary-home transactions in 10 cities can maintain positive growth.
• Whether the overall sell-through rate can remain near or above 50%.
• Whether the Centaline six-city secondary-home listing price tracking index continues to decline.
• Whether the tier-1 city property broker index remains above the prior week's level.
• Changes in the latest ratings, prices, financing, and sales data of key developers.