Mainland primary sales turn positive year over year so far in July, while Hong Kong new launches sell strongly but valuation leading indicators cool

Overview

This report is JPMorgan's high-frequency data tracking on real estate and conglomerates in Mainland China and Hong Kong, covering primary sales, secondary transactions, listing volumes, leading price indicators, southbound holdings, stock performance, and credit recommendations. The overall conclusion is that Mainland China sales data are showing marginal improvement, especially with primary sales turning positive year over year so far in July; in Hong Kong, new project sales remain strong, but valuation and broker sentiment indicators have softened, suggesting home price momentum may slow in 2H 2026.

Core views

In Mainland China, primary sales in 60 cities rose 8% year over year so far in July, the strongest performance this year, but the report emphasizes that part of the improvement is mainly driven by a low base and differences in new launch intensity. The secondary market is more supportive: real-time secondary transactions in 9 cities rose 6% year over year, tier-1 cities rose 7% year over year, and listings in tier-1 cities continue to decline. In Hong Kong, the residential price index rose 0.8% week over week and is up 11% year to date, while new project sell-through remains strong; however, CVI fell from 78 to 67 and CSI from 63 to 60. Although both remain in positive territory, they indicate that growth may slow. On credit, Vanke's support from a small shareholder loan from Shenzhen Metro is viewed as a positive signal, while a potential rights issue by New World Development, if completed, could help restore coupon payments on perpetuals and optimize its high-coupon perpetual structure.

Analysis framework

The report uses a high-frequency market monitoring framework, combining Mainland China's primary online sales registrations, real-time secondary transactions, secondary listing volumes, and Centaline leading indicators, as well as Hong Kong new project sell-through, secondary transactions, CCL home prices, CVI and CSI indicators, together with southbound holdings, stock performance, and credit bond valuations, to assess real estate fundamentals, sentiment, price trends, and investable names.

Methodology notes

• High-frequency property data trackingPrimary sales and secondary transaction monitoring

  Use online registrations, real-time transactions, and listing volumes to gauge transaction heat and supply-demand pressure.

  For Mainland China, the report uses primary online registrations in 60 cities, secondary online registrations in 12 cities, real-time secondary transactions in 9 cities tracked by Iceberg, and listing volumes in 10 cities; it notes that real-time transactions usually lead official online registrations by several weeks.

• Leading indicatorsCentaline indicator system

  Use Centaline asking price indices, manager confidence indices, CVI, and CSI to measure changes in prices and sentiment.

  In Mainland China's tier-1 cities, the secondary asking price index fell from 16.4 to 15.9, while the manager confidence index remained at 53; in Hong Kong, CVI fell from 78 to 67 and CSI from 63 to 60, still positive but indicating slowing momentum.

• Credit researchRelative value and fundamental credit ratings

  Combine issuer debt-servicing ability, liquidity, leverage, and bond relative value to make credit recommendations.

  The report states that J.P.Morgan credit ratings use Overweight, Neutral, and Underweight, with the rating meaning based on expected performance over the next three months relative to an index, sector, or benchmark.

Asset mapping & comparison

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

• Mainland China property developer equities

  Affected by primary sales, secondary transactions, listing volumes, and policy expectations

  Strengths

  Primary sales have turned positive year over year so far in July, secondary transactions continue to grow, and declining listings in tier-1 cities support price stabilization.

  Weaknesses

  Weekly primary sales are still down 3% year over year; part of the improvement comes from a low base and differences in launch timing, while private and distressed developers still face heavy valuation pressure.

  Comparison

  The sector fell 3% last week, underperforming the Hang Seng Index at +0.3%; SOE developers are relatively more stable than private developers in both valuation and fundamentals.

  Risks

  Sales improvement may prove unsustainable, home prices may decline again, debt extension pressure may rise, and policy support may fall short of expectations.

• Hong Kong property developers and landlords

  Affected by new project sell-through, secondary prices, the interest rate environment, and recovery in tourism/consumption

  Strengths

  New project sell-through is high, Hong Kong residential prices are up 11% year to date, and some landlord and conglomerate stocks have outperformed.

  Weaknesses

  CVI and CSI have declined, secondary transactions are down 33% year over year, and price momentum may slow in the second half of the year.

  Comparison

  The Hong Kong property and conglomerates sector rose 2% last week, outperforming the Hang Seng Index; Swire Pacific, Swire Prop, and HKL stood out.

  Risks

  Slower home price momentum, insufficient transaction volume, changes in interest rates or the macro environment, and weaker-than-expected recovery in commercial rents.

• China high-yield property credit bonds

  Affected by issuer liquidity, debt maturity arrangements, shareholder support, and relative yield

  Strengths

  The JACI China HY Property Index has returned 7% year to date; Vanke received loan support from Shenzhen Metro, and a potential rights issue by New World Development could improve the outlook for its perpetuals.

  Weaknesses

  Some issuers still rely on extensions, asset disposals, or shareholder support, with limited visibility on debt repayment.

  Comparison

  The JACI China HY Property Index rose 0.8% last week, outperforming China HY's 0.3%.

  Risks

  Rights issue or financing may not materialize, debt extension negotiations may fail, coupon deferrals may occur, and asset values may be marked down.

Key data

• Primary online registrations in 60 cities-3% year over year last week; +8% year over year so far in JulyThe so-far-in-July figure turned positive from -1% year over year in June, but is affected by a low base and differences in new launch intensity.
• Real-time secondary transactions in 9 cities tracked by Iceberg+6% year over yearThe previous reading was +7%; tier-1 cities were +7% year over year, including Shenzhen +25%, Beijing +16%, and Shanghai +3%.
• Secondary transactions in tier-1 cities+11% year over year so far in JulyReal-time transactions usually lead official transaction registrations by several weeks.
• Secondary online registrations in 12 cities+9% year over yearThe prior week was +10%.
• Secondary listing volume in tier-1 citiesDown 4.6% from the March peakThe report views the decline in listings as an important factor supporting price stabilization.
• Centaline secondary asking price index in tier-1 cities of Mainland ChinaDown from 16.4 to 15.9This index represents the share of projects raising asking prices.
• Centaline secondary manager confidence index in Mainland China53Unchanged from the prior reading.
• Weekly performance of Mainland China property stocksSector down 3%Underperformed the Hang Seng Index at +0.3%; C&D rose 3%, Sunac rose 2%, while Sunac Services fell 7% and Shimao fell 6%.
• Hong Kong residential price index+0.8% week over week; +11% year to dateIt has reached JPMorgan's full-year target of 10%-15%, and the report expects gains of less than 5% in 2H 2026.
• Sell-through of Garden Regency new launch100% sold outThe second batch of 118 units was priced at about HK$13.5K psf on average, 17% above secondary market levels.
• Sell-through of La Mirabelle II new launch97% soldThe first batch of 108 units was priced at about HK$15.8K psf on average, 1% above the previous phase and 5% below secondary market levels.
• Hong Kong CVIDown from 78 to 67The lowest since October 2025, but still above the 60 threshold for positive growth.
• Hong Kong CSIDown from 63 to 60Above 50 indicates sentiment remains positive and home prices may still rise.
• Secondary transactions in 35 major housing estates in Hong Kong44 units; +26% week over week; -33% year over yearThis shows that the secondary market remains weak year over year.
• Share prices of Hong Kong property and conglomeratesSector up 2%Outperformed the Hang Seng Index at +0.3%; Swire Pacific +8%, Swire Prop +6%, HKL +5%, Hang Lung Prop -2%.
• JACI China HY Property Index+0.8% last week; +7% year to dateCompared with China HY at +0.3% last week.
• Vanke liquidity supportShenzhen Metro provided a Rmb519mn shareholder loanUsed to support bond repayment, secured by project receivables, with LTV at 100%.
• Potential rights issue by New World DevelopmentRumored size of US$4bnIf implemented, JPMorgan expects it may restore coupon payments on perpetuals and allow early redemption or tender buybacks of some high-coupon perpetuals.

Impact & implications

The investment implication is that Mainland China property fundamentals have not fully recovered, but the combination of secondary transactions and listing volumes is showing more sustainable signs of price stabilization, favoring quality SOE developers and property/commercial real estate names with relatively stable operating cash flow. In Hong Kong, strong near-term new project sales support developer sentiment, but home prices have already reached the full-year target ahead of schedule and leading indicators are softening, so upside elasticity may decline. In credit, shareholder support for selected issuers, potential capital replenishment, and the relative value of high-coupon bonds remain the core drivers.

Risks

• The sales improvement in Mainland China in July may be driven mainly by a low base and the intensity of new launches, and its sustainability still needs to be verified.
• Hong Kong residential prices are already up 11% year to date, close to or at JPMorgan's full-year target, so further gains may be lower than in the first half.
• Although Hong Kong CVI and CSI remain above positive thresholds, both have declined, signaling slower market sentiment and price momentum.
• Private and distressed developers still face weak sales, debt extensions, insufficient liquidity, and valuation pressure.
• Credit bond investments depend on whether issuer financing, shareholder support, rights issues, or asset disposals can be delivered.
• The report discloses that J.P.Morgan has relationships with entities such as Longfor Group, New World Development, and Shui On Land through client business, investment banking business, or holdings, and investors should be aware of potential conflict-of-interest disclosures.

What to watch

• Whether year-over-year growth in primary sales in 60 Mainland China cities so far in July can continue into August.
• Whether Iceberg real-time secondary transactions continue to lead improvement in official secondary online registrations.
• Whether listing volumes in tier-1 cities continue to decline, and whether price indices can stabilize and rebound.
• Whether Hong Kong CVI continues to fall and drops below 60, and whether CSI falls below 50.
• Sell-through performance of subsequent batches of Hong Kong new launches, especially the second batch of 135 units at La Mirabelle II launched on July 30.
• The plan for Vanke's remaining Rmb3.4bn bonds due in 2026, including whether the 40% repayment and 60% extension can be implemented.
• Whether New World Development's potential US$4bn rights issue proceeds, and arrangements for restoring perpetual coupon payments, redemption, or tender buybacks.
• Changes in southbound fund holdings, especially positioning direction in leading Mainland China and Hong Kong property companies.