China property market Report Interpretation

Overview

This weekly China property update finds that transaction activity flattened in Week 31 after July, while the market showed some support from lower listings and declining inventory. Goldman Sachs nevertheless highlights continuing weakness in new-home sales, softer secondary-market price expectations and declining construction activity.

Core views

Goldman Sachs says primary and secondary-market transaction volumes both flattened sequentially in Week 31. New-home GFA sold was flat week on week and down 6% year on year in about 75 cities, while new-home search activity was also flat. Secondary transactions declined 1% week on week but rose 4% year on year in about 20 cities. For July, median primary GFA sold was down 14% month on month and up 1% year on year; secondary GFA sold was down 7% month on month and up 5% year on year. Year to date, average primary GFA sold was down 13% year on year and remained 17% below 2024 and 39% below 2023 levels. Secondary GFA sold was up 1% year on year and 15% and 13% above 2024 and 2023 levels, respectively. The report characterizes broader market activity as stable but not improving decisively. New-home search activity was flat week on week, while secondary subscription sales and transaction prices were broadly stable. Secondary-market visits in monitored cities increased 3% week on week, and July new-listing supply declined 6% month on month and 17% year on year. These supply-side changes accompany an inventory balance that fell 0.4% week on week and was 6.4% below end-2025 levels. Inventory months stood at 27.0, compared with average levels of 27.5 in June and 27.1 in July 2026. However, both agents' and sellers' expectations for secondary-property price appreciation edged down. The Centaline Salesman Index fell 0.6 percentage points week on week, although it was 2.9 percentage points higher year on year; the Centaline Seller Asking Index fell 0.4 percentage points week on week and 5.3 percentage points year on year. Policy messaging was somewhat more supportive. Goldman Sachs notes that the July Politburo meeting emphasized building a “safety barrier,” stabilizing the property market and effectively implementing debt-resolution plans. It contrasts this with the end-July meeting a year earlier, which did not explicitly mention real estate, and notes that both Politburo meetings this year referred to stabilizing the property market. Construction indicators remain a weaker part of the outlook. Goldman Sachs' Property Completion tracker, derived from its China float-glass supply-demand outlook and proprietary weekly float-glass demand model, indicates a high-teens percentage year-on-year decline in July 2026 completions. This compares with a 25% year-on-year decline reported by NBS and an approximately 20% decline estimated by Goldman Sachs for June. Goldman Sachs estimates FY26E completions will decline 15% year on year. It also expects July new starts to decline by a mid-twenties percentage year on year, compared with NBS's 26% year-on-year decline and Goldman Sachs' high-twenties decline estimate for June; its signal draws on land-sales trends in 300 cities and a nationwide cement-shipment ratio that rose 0.3 percentage points week on week to 42.2%. BEKE's combined new and existing-home GTV is estimated to have risen 2% year on year in 2Q26, with new-home GTV down 23% and existing-home GTV up 12%. On market performance and valuation, covered stronger SOE developers gained 2% on average during Week 31. Poly rose 5% week on week and Jinmao rose 4%, while other developers gained 4% on average. Offshore covered developers gained 2% on average versus a 3% gain for MSCI China; onshore covered developers gained 5% on average versus a 3% decline for CSI 300. Goldman Sachs places offshore coverage at an average 35% discount to end-2026E NAV and 0.5x 2026E P/B, compared with historical downturn trough readings of 39%/0.7x in 2H2008, 73%/0.9x in 2H2011 and 58%/0.9x in 1H2014. Onshore coverage trades at a 29% discount to end-2026E NAV and 0.5x 2026E P/B, versus 67%/1.6x, 64%/1.5x and 61%/1.2x at those respective troughs.

Analysis framework

The report combines weekly and monthly primary- and secondary-market transaction trackers with search, visit, listing, inventory and price-expectation indicators. It then links property completions to a proprietary float-glass supply-demand model, uses land-sales and cement-shipment data to gauge new starts, and compares covered-developer share-price performance and valuation multiples with historical downturn troughs.

Methodology notes

• Industry AnalysisSupply-demand framework

  Weekly property-market supply-demand tracking and a float-glass supply-demand model for completions

  The report reads transactions, listings, inventory, land sales and downstream float-glass demand together to infer housing-market balance and construction activity.

• Valuation methodsP/NAV Resources and Real Estate Valuation

  Discount to end-2026E NAV

  Goldman Sachs compares developers' share prices with estimated net asset value to show how far the coverage universe trades below its assessed asset value.

• Valuation methodsPB valuation

  2026E price-to-book comparison

  The report uses forecast P/B multiples and historical trough comparisons to contextualize current developer valuations.

Asset mapping & comparison

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

• Poly (600048.SS)

  Covered stronger SOE developer; the report identifies it as a Week 31 outperformer.

  Strengths

  Share price rose 5% week on week.

  Comparison

  Outperformed the 2% average Week 31 gain for covered stronger SOE developers.

• Jinmao (0817.HK)

  Covered stronger SOE developer; the report identifies it as a Week 31 outperformer.

  Strengths

  Share price rose 4% week on week; rated Buy in the report.

  Comparison

  Outperformed the 2% average Week 31 gain for covered stronger SOE developers.

• CMSK (001979.SZ), COLI (0688.HK), CR Land (1109.HK), Greentown (3900.HK)

  Covered developers included in the stronger-SOE valuation comparison.

  Strengths

  Part of the coverage universe used for the stronger-SOE performance and valuation assessment.

  Comparison

  Stronger SOE developers gained 2% on average in Week 31.

• Longfor (0960.HK), Seazen (1030.HK), Vanke A (000002.SZ), Vanke H (2202.HK)

  Covered developers included in the other-developer valuation comparison.

  Strengths

  Other developers gained 4% on average in Week 31.

  Comparison

  Their group outperformed the 2% average gain for covered stronger SOE developers during the week.

Key data

• Week 31 primary GFA soldFlat wow; -6% yoyApproximately 75 cities
• Week 31 secondary transactions-1% wow; +4% yoyApproximately 20 cities
• July primary / secondary GFA sold-14% / -7% mom; +1% / +5% yoyMedian sales-volume comparison
• YTD primary / secondary GFA sold-13% / +1% yoyPrimary sales were -17%/-39% versus 2024/2023; secondary sales were +15%/+13% versus those years
• Inventory months27.0Versus 27.5 in June and 27.1 average in July 2026
• FY26E completions-15% yoyGoldman Sachs estimate; July tracker implies a high-teens year-on-year decline
• Developer valuationOffshore: 35% NAV discount and 0.5x 2026E P/B; onshore: 29% and 0.5xAverage covered-developer valuations

Impact & implications

The report's evidence points to a market that has stabilized sequentially rather than turned decisively upward: lower listings and inventory provide support, but weak primary demand, lower price expectations and contracting construction activity remain constraints. Goldman Sachs also highlights that covered developers are trading at depressed NAV discounts and P/B multiples relative to selected historical downturn periods.

What to watch

• Weekly primary and secondary transaction volumes, search activity, visits, listings and price-expectation indicators.
• Inventory balance and inventory months across monitored cities.
• July property completions, new starts, land-sales trends and cement-shipment data.
• Implementation of property-stabilization and debt-resolution measures referenced at the July Politburo meeting.