Mainland China and Hong Kong property markets Report Interpretation

Overview

This weekly monitor tracks Mainland China and Hong Kong property-market activity, equity performance and selected credit views. JPMorgan sees a clearer near-term improvement in China secondary sales, while Hong Kong primary launches show pricing-led demand but home prices are expected to remain range-bound in the second half of 2026.

Core views

Mainland China secondary-market indicators improved materially. Iceberg's nine-city real-time weekly secondary sales rose 22% year on year, accelerating from 8% in the prior reading; tier-1 sales rose 20%, versus 5% previously. The report notes that real-time sales lead official registrations by several weeks. Official 12-city secondary registrations increased 13% year on year, compared with 3% previously. By contrast, 19-city primary sales registrations fell 12% year on year after a 4% increase in the prior period, although tier-1 primary sales outperformed with 39% year-on-year growth. Leading indicators were constructive but not uniformly strong. Tier-1 visitation rose from 21.8 to 22.8; JPMorgan defines readings of 20-40 as a recovering market and below 20 as stagnation. The Centaline manager-confidence index increased from 53 to 55. Tier-1 asking-price breadth improved slightly, with Centaline's index rising from 13.5 to 13.7, but Iceberg's tier-1 listing-price index fell 0.2% week on week after a 0.1% decline previously. Secondary listings increased 0.3% week on week across ten cities and 0.9% in tier-1 cities, yet remain about 5% below their March peak; the report links lower listings with home-price stabilization. In Hong Kong, new-project pricing continued to drive primary-market absorption. CR Land's Sterling launched a third batch of 101 West Kowloon units at HK$19,700 per sq ft, 2% above the second batch but 22% below secondary-market pricing, and was fully sold. Henderson's Chester II launched its first 53 units at HK$21,400 per sq ft, 2% and 1% above the previous phase and secondary prices respectively; subsequent batches carried a 2% average selling-price increase, though JPMorgan characterizes pricing as conservative. Secondary transactions at the 35 major estates were weaker at 36 units, down 27% week on week and 28% year on year, while appointments at the top 15 estates rose 1% week on week and 6% year on year. Hong Kong's home-price index rose 0.3% week on week after a 0.4% decline in the preceding week. Prices were up 12% year to date, already within JPMorgan's 10-15% full-year target range; the institution expects prices to remain range-bound in 2H26. The Centa Valuation Index eased from 79.7 to 79.4, while tourist arrivals increased 22% year on year despite an 11% week-on-week decline. SHKP won MTRC's tender for Tuen Mun A16 Station Phase 2. The development has 3.0 million sq ft of gross floor area, including 0.3 million sq ft of retail space, and approximately 5,500 units. Together with Phase 1, which SHKP won in November 2025, the combined project would provide about 6,800 units. MTRC did not disclose consideration; using a market-estimated land value of HK$8.2-13.6 billion, or HK$2,700-4,500 per sq ft, and a nearby secondary average selling price of HK$12,000 per sq ft, JPMorgan expects a margin above 20%. Property equities were broadly stable in Mainland China, with the sector flat against a 1% decline in the Hang Seng Index as sentiment temporarily stabilized after the '828' policy on pre-sales phase-out. Seazen and Country Garden each gained 5%, while Shimao fell 7% and C&D, Greentown and Longfor each declined 5%. In Hong Kong, the sector rose 1% versus a 1% HSI decline; Hongkong Land, CK Asset and SHKP outperformed, while CK Hutchison and Champion REIT lagged. Southbound holdings rose 0.7% week on week for Mainland China developers but declined 0.04% for Hong Kong property and conglomerates. On credit, the JACI China HY Property Index fell 0.5% for the week versus a 0.1% fall for China high yield, reducing its year-to-date return to 10.5%. JPMorgan prefers Longfor because it expects the company to manage RMB6-7 billion of annual maturities in 2027-28 through its solid balance sheet and investment-property-supported free cash flow; it remains Overweight on Longfor bonds yielding 9-9.5%. The report says the pre-sales-system phase-out could slow developers' land banking and accelerate property-sales declines in 2027, supporting its preference for issuers with meaningful investment-property or recurring-rental-income exposure. It also remains Overweight on Hysan's 7.2% perpetual, expecting deleveraging from capital recycling and LG8 earnings contribution from 4Q26.

Analysis framework

JPMorgan combines high-frequency transaction, registration, visitation, listing, pricing and sentiment indicators with project-level launch data to assess residential-market momentum. It then reviews equity-price and southbound-flow data, applies valuation summaries for covered stocks, and evaluates selected credit instruments through issuer fundamentals, maturity profiles, yields, spreads and relative-value views.

Methodology notes

• Industry AnalysisSupply-demand framework

  Monitoring transactions, listings, visitation, launches and pricing across Mainland China and Hong Kong residential markets.

  The report uses sales and demand indicators alongside available listing supply and launch pricing to judge whether housing-market conditions are stabilizing or improving.

• Industry AnalysisVolume-price decomposition

  Separating transaction volumes, listing volumes and changes in asking or home-price indices.

  This helps distinguish a recovery in activity from a recovery in prices; the report notes stronger secondary sales despite mixed listing-price signals.

• Fixed Income and CreditSpread analysis

  Assessing property bonds using yields, Z-spreads, duration, maturities and issuer debt-service capacity.

  JPMorgan uses these measures alongside cash flow, leverage and liquidity considerations to express relative-value credit preferences.

Asset mapping & comparison

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

• China Resources Mixc Lifestyle Services (1209.HK)

  JPMorgan top equity pick in Mainland China property.

  Strengths

  Selected by JPMorgan as a top pick.

• KE Holdings (BEKE; 2423.HK)

  JPMorgan top equity pick in Mainland China property.

  Strengths

  Selected by JPMorgan as a top pick.

• China Resources Land (1109.HK)

  JPMorgan top equity pick in Mainland China property.

  Strengths

  Selected by JPMorgan as a top pick.

• Swire Properties (1972.HK)

  JPMorgan top equity pick in Hong Kong property.

  Strengths

  Selected by JPMorgan as a top pick.

• Wharf REIC (1997.HK)

  JPMorgan top equity pick in Hong Kong property.

  Strengths

  Selected by JPMorgan as a top pick.

• Link REIT (0823.HK)

  JPMorgan top equity pick in Hong Kong property.

  Strengths

  Selected by JPMorgan as a top pick.

• Hongkong Land (HKLD.SI)

  JPMorgan top equity pick in Hong Kong property.

  Strengths

  Selected by JPMorgan as a top pick.

• Longfor bonds

  JPMorgan remains Overweight on Longfor's curve, including the 2029 bonds.

  Strengths

  Solid balance sheet, investment-property-supported free cash flow and a stated repayment plan support debt servicing.

  Weaknesses

  Annual maturities of RMB6bn-7bn are due in 2027-28.

  Comparison

  Preferred among names with meaningful investment-property or recurring-rental-income exposure.

  Risks

  The pre-sales phase-out could slow land banking and accelerate property-sales declines in 2027.

• Hysan 7.2% perpetual

  JPMorgan remains Overweight.

  Strengths

  Expected deleveraging through capital recycling and LG8 earnings contribution from 4Q26.

Key data

• Mainland China nine-city real-time secondary sales+22% Y/YAccelerated from +8% previously; tier-1 cities rose 20% Y/Y.
• Mainland China 19-city primary registrations-12% Y/YVersus +4% previously; tier-1 cities outperformed at +39% Y/Y.
• Mainland China 12-city secondary registrations+13% Y/YVersus +3% previously.
• Hong Kong home-price performance+12% YTD; +0.3% W/WThe year-to-date gain has reached JPMorgan's 10-15% full-year target range.
• SHKP Tuen Mun A16 Station Phase 23.0mn sq ft GFA; c.5,500 unitsMarket-estimated land value is HK$8.2bn-13.6bn; JPMorgan expects margin above 20%.
• JACI China HY Property Index-0.5% W/W; +10.5% YTDCompared with -0.1% weekly performance for China high yield.

Impact & implications

JPMorgan views the acceleration in China secondary sales and improving leading indicators as evidence of a recovering activity backdrop, though weak aggregate primary registrations and mixed price signals temper the conclusion. In Hong Kong, successful projects underscore the importance of attractive pricing, while the institution's range-bound 2H26 price outlook limits the implication of the strong year-to-date home-price gain. Its stated preferences favor selected recurring-income, property-management, landlord and credit exposures.

Risks

• JPMorgan says the phase-out of China's pre-sales system may slow developers' land banking and lead to a faster decline in property sales in 2027.
• Longfor faces RMB6bn-7bn of annual maturities in 2027-28, although JPMorgan expects it to manage them.