Diverging Weekly China Property Transactions: New Homes Rebound YoY, Secondary Homes Weaken

Overview

This report is Morgan Stanley’s Weekly Database Tracker #28 for China Property, focused on high-frequency indicators such as new and secondary residential transactions, prices, and broker indices. It covers the week through July 12, 2026, and includes in the appendix the ratings and regulatory disclosures of China property coverage names.

Core views

The key conclusion is a divergence in transaction structure: weekly new-home sales remain positive year-over-year, but the growth rate has clearly slowed versus the prior week; secondary-home weekly sales have turned negative year-over-year, although they remain slightly positive on a year-to-date basis. By city tier, first-tier cities remain more resilient, while new-home sales in third-tier cities face clear pressure. The industry view is In-Line, meaning the analyst expects sector performance over the next 12-18 months to be broadly in line with the relevant market benchmark.

Analysis framework

The report uses a high-frequency database tracking method, comparing week-over-week changes in year-over-year growth for registration counts, the prior week’s year-over-year changes, and year-to-date cumulative year-over-year performance. It breaks down new-home sales by first-, second-, and third-tier cities, and secondary-home sales by first- and second-tier cities. It also references the Zhongyuan secondary listing price tracking index and the first-tier city property broker index to observe price and market activity.

Methodology notes

• high_frequency_trackerWeekly Database Tracker

  Weekly real estate transaction tracking

  Using weekly registration counts, year-over-year growth, year-to-date cumulative year-over-year change, and city-tier decomposition to gauge short-term transaction momentum in China’s real estate market.

• industry_ratingMorgan Stanley Industry View

  In-Line

  In-Line means the analyst expects the covered industry to perform broadly in line with the relevant market benchmark over the next 12-18 months.

Asset mapping & comparison

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

• China Property sector

  directly covered sector

  Strengths

  New- and secondary-home sales in first-tier cities remain positive year-over-year, and 10-city secondary-home sales are still +4% year-to-date.

  Weaknesses

  The 50-city new-home sales are still -11% year-over-year, third-tier city new-home sales are down 20%, and second-tier city secondary-home sales are down 9%.

  Comparison

  New-home weekly year-over-year at +8% is better than secondary-home weekly year-over-year at -3%; first-tier cities are clearly stronger than third-tier cities.

  Risks

  Uneven recovery in transaction momentum, weak demand in lower-tier cities, weakening price expectations, and uncertain policy effectiveness.

• Hong Kong-listed China property developers

  part of the covered company universe

  Strengths

  The report lists ratings and prices for several mainland-listed Chinese developers, which helps in mapping sector views to related equities.

  Weaknesses

  No company-level earnings forecasts or target-price updates are provided in this report.

  Comparison

  The coverage table includes China Overseas Land & Investment Ltd., China Resources Land Ltd., Longfor Group Holdings Ltd., and Yuexiu Property Co Ltd., among others.

  Risks

  Individual stock performance still depends on balance-sheet strength, sales realization, financing conditions, and policy developments.

• A-share China property developers

  part of the covered company universe

  Strengths

  The report covers A-share names such as China Vanke Company Ltd. (000002.SZ), Gemdale Corporation, Poly Developments and Holdings Group, Seazen Holdings Company Ltd., and others.

  Weaknesses

  High-frequency transaction indicators cannot directly replace company-level sales, profit, and cash-flow analysis.

  Comparison

  Some A-share names are rated Equal-weight, Underweight, or Overweight, corresponding to relative return expectations.

  Risks

  Weakening sales in third-tier cities, downward price expectations, and credit risk could affect valuations.

Key data

• 50-city new-home weekly registration count+8% YoYWeek ending July 12, 2026; prior week was +24% YoY.
• 50-city year-to-date new-home sales-11% YoYReflects that cumulative new-home sales remain below the same period last year.
• First-tier city new-home weekly sales+26% YoYPrior week was -6% YoY, indicating clear improvement.
• Second-tier city new-home weekly sales+15% YoYPrior week was +37% YoY, showing a slowdown in momentum.
• Third-tier city new-home weekly sales-20% YoYPrior week was +2% YoY, now turned into a clear decline.
• 10-city secondary-home weekly registration count-3% YoYPrior week was +8% YoY, indicating weaker weekly performance.
• 10-city year-to-date secondary-home sales+4% YoYDespite weaker weekly performance, cumulative year-over-year remains positive.
• First-tier city secondary-home weekly sales+6% YoYPrior week was +14% YoY; still positive growth, but with slower momentum.
• Second-tier city secondary-home weekly sales-9% YoYPrior week was +3% YoY, now turned negative.
• Zhongyuan six-city secondary listing price tracking index16.3%Prior week was 16.7%.
• First-tier city property broker index51.8Prior week was 54.7.

Impact & implications

From an investment perspective, weekly year-over-year growth in new-home sales provides short-term support, but the deceleration and third-tier weakness indicate that demand recovery is not broad-based. Secondary-home sales have moved from positive to negative year-over-year; together with the declines in the listing-price index and broker index, this suggests that market activity and price expectations still require close monitoring. Overall, the setup is more supportive of a neutral allocation stance than a clear upside or downside call on the sector.

Risks

• Year-to-date new-home sales are still down year-over-year, so the cumulative fundamental picture is not fully healed.
• Weekly secondary-home transactions have moved from positive to negative, possibly indicating weakening marginal demand.
• New-home sales in third-tier cities are down 20% year-over-year, highlighting significant pressure in lower-tier markets.
• The Zhongyuan six-city secondary listing price tracking index and first-tier property broker index both declined from the prior week.
• Morgan Stanley discloses investment-banking or other service relationships with some covered companies; investors should treat this research as one input to decision-making rather than the sole basis.

What to watch

• Whether the 50-city weekly new-home registration count can maintain year-over-year positive growth.
• Whether 10-city secondary-home transactions recover from -3% YoY to positive territory.
• Whether first-tier city resilience can expand to second- and third-tier cities.
• Whether the Zhongyuan secondary listing price index and property broker index continue to decline.
• Whether policy support, financing conditions, and developer sales data validate the In-Line sector assessment.