China Housing Market Weekly Sales Improve Week-over-Week, Industry View Remains Neutral
AI summary card
China Housing Market Weekly Sales Improve Week-over-Week, Industry View Remains Neutral
For the week ended May 31, 2026, primary housing sales in 50 cities turned positive YoY to +10%, secondary housing sales in 10 cities rose YoY to +9%, but overall absorption rate fell to 53%, with the industry view labeled as 'In-Line'.
- Primary housing weekly sales in 50 cities YoY +10% (prev -7%), tier-3 cities significantly improved to +34%
- Secondary housing weekly sales in 10 cities YoY +9% (prev +45%), YTD cumulative +5%
- Overall absorption rate 53% (prev 66%), tier-1 cities 63%, tier-2 cities 42%
- Centaline six-city secondary housing asking price index 17.5% (prev 18.2%), tier-1 cities brokerage sentiment index 53.8 (prev 55.5)
Report interpretation
Overview
This report is Morgan Stanley's 22nd weekly database tracking report for the China real estate industry, updating core market indicators as of the week ended May 31, 2026, covering primary housing sales in 50 cities, secondary housing sales in 10 cities, absorption rate, and price sentiment indices, with the industry view explicitly labeled as 'In-Line' (in line with benchmark).
Core views
In the primary housing market, the weekly registered sales units in the monitored 50 cities increased 10% YoY (vs -7% in the prior week), but the year-to-date cumulative sales still declined 14% YoY. By city tier, tier-1 cities saw sales increase 4% YoY (prev +8%), tier-2 cities increased 6% YoY (prev -10%), and tier-3 cities significantly improved to +34% YoY (prev -12%), indicating stronger demand recovery in lower-tier cities. In the secondary housing market, the weekly registered sales units in 10 key cities increased 9% YoY (prev +45%), with growth moderating but still positive, and year-to-date cumulative sales increased 5% YoY. Among these, tier-1 cities increased 12% YoY (prev +63%) and tier-2 cities increased 6% YoY (prev +36%). Regarding market absorption and price sentiment, the overall absorption rate was 53% (prev 66%), tier-1 cities 63% (prev 66%), and tier-2 cities 42% (prev no data). The Centaline six-city secondary housing asking price index was 17.5% (prev 18.2%), and the tier-1 cities real estate brokerage sentiment index was 53.8 (prev 55.5). Both price-related indicators declined slightly MoM, reflecting a slight cooling in market sentiment.
Analysis framework
The report employs a high-frequency weekly data tracking framework, focusing on dual-dimension indicators of sales 'volume' (registered units) and market 'price' (asking price index, brokerage sentiment index), combined with YoY and MoM changes to assess short-term marginal trends. The analysis is stratified by city tier (tier-1, tier-2, tier-3) to identify regional divergence characteristics, and incorporates absorption rate as an auxiliary observation point for supply-demand balance, forming a comprehensive assessment of market activity and health.
Methodology notes
Tracking both sales volume (registered units) and price-related indicators (asking price index, brokerage sentiment index) to gauge market sentiment
'Volume' reflects actual transaction activity and demand strength, while 'price' reflects market expectations and supply-demand dynamics; combining both avoids misjudgment from a single indicator and is the common logic for high-frequency real estate monitoring. This report simultaneously presents the weekly changes in volume and price indicators to comprehensively assess market conditions.
Absorption rate as a key observation indicator for inventory digestion speed
Absorption rate = weekly sales volume / weekly new supply (industry standard definition), where the level directly reflects inventory pressure and market heat. This report tracks changes in overall and city-tiered absorption rates to assess short-term supply-demand balance and market resilience.
Key data
- YoY Weekly Sales of Primary Housing in 50 Cities+10%Prev -7%, YTD cum -14%
- YoY Weekly Sales of Secondary Housing in 10 Cities+9%Prev +45%, YTD cum +5%
- Overall Absorption Rate53%Prev 66%
- Centaline Six-City Secondary Housing Asking Price Index17.5%Prev 18.2%
- Tier-1 Cities Real Estate Brokerage Sentiment Index53.8Prev 55.5
Impact & implications
The report notes that weekly sales data improved MoM (especially with significant elasticity in tier-3 cities), but the decline in absorption rate and slight drop in price-related indicators suggest the market remains in a mild recovery phase without a broad-based strong rebound. The industry view remains 'In-Line', implying that the short-term performance expectation for the real estate sector is broadly in line with relevant market benchmark indices, and the sustainability of volume and price indicators needs to be continuously monitored.