China real estate sees a pickup in transactions as the peak season begins, but leading indicators still point to a softer transaction outlook

Overview

This report tracks China's real estate market performance in Week 13. It notes that, as the traditional peak season gets underway, transaction volume rose for a fifth consecutive week, with primary-home sales improving faster while the pace of improvement in secondary-home sales slowed. However, on a YoY basis, March primary-home and secondary-home transactions were still below the same period last year. At the same time, leading indicators such as new-home searches, secondary-home subscription sales, and home-viewing volume continued to weaken, suggesting that the subsequent recovery in transaction volume may be rather subdued.

Core views

The core view is that the short-term improvement in transactions mainly reflects seasonality from the peak season and a low base, rather than a meaningful reversal in demand trends. Local policies continue to ease at the margin, mainly through higher housing provident fund loan limits, interest subsidies, and home-buying subsidies, but the scope and amounts of these policies remain limited. Developer sales, completions, new starts, and post-property-cycle consumption still face YoY pressure, while developer equity valuations remain at discounted levels but lack a clear catalyst.

Analysis framework

The report cross-checks high-frequency weekly sales, city-sample transactions, home-price expectation indices, months of inventory, developer share performance, valuation discounts, and leading indicators across the property chain. Transaction coverage spans primary-home sales in about 75 cities and secondary-home sales in about 20 cities; the completion view combines the GS Property Completion tracker, the float-glass supply-demand model, and official statistics; the new-start view combines land sales trends across 300 cities and the national cement shipment ratio.

Methodology notes

• High-frequency market trackingPrimary and secondary home transaction area tracking

  Track transaction volume on a weekly GFA sold basis to observe WoW, YoY, and year-to-date trends.

  The report uses primary-home transactions in about 75 cities and secondary-home transactions in about 20 cities to measure the strength of demand recovery, and compares 2026 performance with historical paths from 2022 to 2025.

• Leading indicatorsNew-home searches, secondary-home subscription sales, and home-viewing volume

  Use pre-transaction behavior to gauge transaction momentum over the next 2 to 3 weeks.

  Declining new-home searches, falling secondary-home subscription sales, and flat home-viewing volume suggest that the transaction recovery may lack sustained momentum.

• Price expectationsCentaline Salesman Index and Centaline Seller Asking Index

  CSI reflects agents' views on home-price increases, while CAI reflects sellers' listing-price expectations.

  Readings above 50 usually indicate greater optimism about price increases; this report shows the related indicators improved slightly WoW but remained under YoY pressure.

• Valuation frameworkNAV discount and P/B valuation

  Assess developer equity valuation levels using discounts to net asset value and price-to-book ratios.

  Offshore-covered developers trade at an average 35% discount to expected 2026 NAV and 2026E P/B of 0.5x; onshore-covered developers trade at an average 23% discount and 2026E P/B of 0.4x.

Asset mapping & comparison

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

• Chinese real estate developers

  Directly relevant

  Strengths

  Valuations are deeply discounted, and if policy steps up or transactions keep improving, there may be room for a phased recovery.

  Weaknesses

  Sales remain weak YoY, leading indicators are softening, and the industry's fundamentals have not yet confirmed a reversal.

  Comparison

  Offshore-covered developers fell 1% on average in Week 13, while onshore-covered developers were flat on average, both weaker than the major indices.

  Risks

  Peak-season transactions fall short of expectations, policy support is limited, and financing and cash flow pressures persist.

• Strong SOE developers

  Relatively defensive assets within the sector

  Strengths

  They usually have stronger financing capacity and higher project quality, making them relatively resilient during market downturns.

  Weaknesses

  Share prices still fell about 1% in Week 13, with no clear outperformer.

  Comparison

  Performance was close to that of other SOE developers, but they did not materially outperform the broader market.

  Risks

  Weak industry demand may weigh on valuation and sales growth.

• Private developers

  High-beta related assets

  Strengths

  If the sales and financing environment improves materially, share price elasticity could be greater.

  Weaknesses

  Credit risk, cash flow pressure, and investor risk appetite constraints remain more pronounced.

  Comparison

  Private developers' average share prices were broadly flat in Week 13.

  Risks

  Insufficient sales recovery, debt restructuring, or renewed liquidity pressure.

• Post-property-cycle sectors

  Indirectly related

  Strengths

  If deliveries and secondary-home transactions improve, demand for building materials, home appliances, and home furnishings may benefit.

  Weaknesses

  The report expects overall home appliance sales to decline YoY in March, while completions and new starts remain under pressure.

  Comparison

  Property-chain related indices were mixed, but fundamental signals remain weak.

  Risks

  Declines in completions, falling new starts, and insufficient household willingness to buy homes.

Key data

• Week 13 primary-home transactions+36% wow, -9% yoySample of about 75 cities, showing a peak-season WoW rebound but still lower YoY.
• Week 13 secondary-home transactions+7% wow, -6% yoySample of about 20 cities, with the pace of improvement slowing versus the previous week.
• March primary-home transaction area+68% mom, -16% yoyOn a median basis, the monthly MoM improvement was sharp but YoY growth remained negative.
• March secondary-home transaction area+74% mom, -14% yoyOn a median basis, secondary homes also showed a MoM recovery and YoY decline.
• 1Q26 primary-home transaction area-23% yoy, versus -19%/-52% in 2024/2023 respectivelyIndicates that the primary-home market is still materially below historical levels.
• 1Q26 secondary-home transaction area-9% yoy, versus +22% in 2024 and flat in 2023Secondary homes remain more resilient than primary homes.
• Months of inventory29.3 monthsInventory balance fell 0.5% WoW, below the 30.0-month average in February 2026.
• March pre-sales estimate for top 100 developers-34% yoySales data from about 75 cities suggests that March pre-sales for the top 100 developers still saw a large YoY decline.
• March completion trendHigh-teens yoy declineThe GSPC tracker shows a high-teens YoY decline in March completions, with FY26E expected to decline 1% YoY.
• March new-start trendAbout -20% yoyJudged from land sales trends across 300 cities and the national cement shipment ratio.
• BEKE 1Q26 GTV-18% yoyOf this, new-home and existing-home GTV are expected to decline 27% and 15% YoY, respectively.
• Offshore developer valuation35% discount to 2026E NAV, 2026E P/B of 0.5xAverage share prices of offshore-covered developers fell 1% in Week 13, lagging the 2% rise in MSCI China.
• Onshore developer valuation23% discount to 2026E NAV, 2026E P/B of 0.4xAverage share prices of onshore-covered developers were flat in Week 13, lagging the 2% rise in the CSI 300.

Impact & implications

From an investment perspective, the property sector remains in a phase where policy support coexists with weak fundamentals. The rebound in transactions on a WoW basis helps ease pessimistic expectations, but YoY declines and weakening leading indicators limit the room for valuation recovery. If policy support does not broaden further, developers' sales, cash flow, and demand across the property chain may remain at low levels, and post-property-cycle sectors such as building materials, home appliances, and home furnishings may also face demand pressure.

Risks

• Local policy support is limited and may be unable to meaningfully reverse demand trends.
• Leading indicators such as new-home searches, secondary-home subscription sales, and home-viewing volume have weakened, which may cause subsequent transactions to undershoot peak-season expectations.
• Primary-home and secondary-home transactions are still down YoY, and developer cash flow recovery may be slower than expected.
• YoY declines in completions and new starts may drag on demand across the property chain.
• Although developer valuations are low, discounts may persist without a fundamental catalyst.
• The sector forecasts and high-frequency sample data in the report may differ from final official data.

What to watch

• Whether stronger real estate support policies are introduced at the central level.
• Whether local easing of housing provident fund rules, home-buying subsidies, and talent-home-buying policies expands further.
• Whether new-home searches, secondary-home subscription sales, and home-viewing volume improve over the next 2 to 3 weeks.
• Whether April YoY declines in primary-home and secondary-home transactions narrow.
• Changes in pre-sales for top 100 developers, BEKE GTV, and months of inventory.
• Indicators for completions, new starts, land sales, cement shipments, and float-glass demand.
• Share price performance of offshore and onshore developers relative to MSCI China and the CSI 300.