China Real Estate Week 15: Transactions remain weak, but leading indicators rebound from low levels

Overview

This report is Goldman Sachs' weekly tracking of China real estate in Week 15, with a focus on new-home sales, existing-home transactions, inventory, completions, new starts, developer share prices, and valuations. The core conclusion is that registered transactions are still in a year-over-year downtrend, but several leading indicators have rebounded from low levels, indicating that the market may be recovering from its recent trough in the near term.

Core views

First, the transaction side remains weak: Week 15 new-home sales area fell 27% week over week and 8% year over year, while existing-home transactions fell 8% week over week and 11% year over year. Second, leading indicators have improved: new-home search activity ended three straight weeks of declines, and existing-home subscriptions and viewings recovered to around the March average. Third, inventory improved slightly, with balances down 0.3% week over week and inventory months at 29.3 months. Fourth, the fundamentals chain remains under pressure; Goldman Sachs' GSPC tracker suggests March 2026 completions may have fallen by the mid-teens year over year, with full-year 2026E completions down about 1% year over year, while March new starts may have declined about 20% year over year. Fifth, valuations are already at the low end of the downcycle: developers trade at about 0.5x 2026E P/B, but a fundamental inflection still requires further confirmation from transactions and price expectations.

Analysis framework

The report uses a weekly high-frequency indicator tracking framework, cross-validating registered transactions, search activity, subscriptions, viewings, new listings, inventory, land sales, cement shipments, flat glass demand, developer share prices, and NAV discounts to judge marginal changes in real estate demand, supply, and capital-market pricing.

Methodology notes

• High-frequency real estate trackingWeekly transaction and leading-indicator framework

  Use new-home and existing-home transactions, searches, subscriptions, viewings, and listing pace to judge demand changes.

  Registered transactions reflect completed deals, while searches, subscriptions, and viewings are more forward-looking; transactions were still weak this week, but forward indicators improved, so the report emphasizes a rebound from low levels rather than a trend recovery.

• Completion forecastGS Property Completion (GSPC) tracker

  Infer the trajectory of property completions based on a flat-glass supply-demand model.

  Goldman Sachs uses the China flat-glass industry outlook and its proprietary weekly flat-glass demand model to infer completed floor area, with results indicating that March 2026 completions fell by the mid-teens year over year and full-year 2026E completions are down about 1% year over year.

• Valuation comparisonNAV discount and P/B cycle comparison

  Use 2026E NAV discounts and 2026E P/B to gauge where developers sit in the valuation cycle.

  Offshore covered developers trade at an average 33% discount to expected NAV at end-2026, onshore covered developers at a 21% discount, and both trade at about 0.5x 2026E P/B, indicating valuations are close to the low end of the downcycle.

Asset mapping & comparison

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

• Stronger state-owned developers

  One of the core real estate stock groups covered in the report

  Strengths

  Average share prices rose 3% in Week 15; financing and credit resilience are relatively stronger, and Jinmao (0817.HK, Buy) gained 6% in the week.

  Weaknesses

  Still weighed down by weak sector transactions and price expectations.

  Comparison

  It outperformed some other state-owned developers, but did not significantly beat all onshore covered developers.

  Risks

  If the transaction rebound does not persist, the valuation re-rating could fade.

• Private-sector developers

  Risk-sensitive assets in the real estate sector

  Strengths

  Average share prices rose 3% in Week 15, offering trading elasticity in a low-valuation environment.

  Weaknesses

  Credit, financing, and sales-collection pressure are relatively higher.

  Comparison

  Weekly gains were close to those of stronger state-owned developers, but fundamental visibility is weaker.

  Risks

  Further declines in sales, weaker price expectations, or financing improvement below expectations.

• Offshore covered developers

  Valuation sample for Hong Kong-listed and offshore real estate stocks

  Strengths

  On average they trade at a 33% discount to expected NAV at end-2026, with 2026E P/B around 0.5x, indicating low valuations.

  Weaknesses

  Average share prices rose 2% in Week 15, below MSCI China's 3%.

  Comparison

  Relative to historical troughs, the NAV discount is smaller than in some extreme cycles, but P/B is lower.

  Risks

  Hong Kong risk appetite, USD financing conditions, and volatility in sector sales.

• Onshore covered developers

  Valuation sample for A-share property developers

  Strengths

  Average share prices rose 4% in Week 15, with 2026E P/B around 0.5x.

  Weaknesses

  They trade at an average 21% discount to expected NAV at end-2026 and still lag CSI 300's 5% weekly gain.

  Comparison

  Weekly performance was stronger than offshore covered developers, but slightly weaker than the broad benchmark index.

  Risks

  Policy expectations not fully realized, sales improvement not sustained, and valuation trough lasting longer.

• Home appliances, building materials, and home-furnishing chain

  Downstream sectors linked to the property after-cycle

  Strengths

  Can serve as a downstream observation set for changes in completions and existing-home transactions.

  Weaknesses

  The report expects overall home-appliance sales in March to likely decline year over year.

  Comparison

  Demand is related to existing-home sales, completions, and renovation activity, but does not move perfectly in sync.

  Risks

  Completion declines, weaker existing-home transactions, and insufficient consumer willingness to spend.

Key data

• Week 15 new-home sales area-27% wow，-8% yoyThe year-to-date average is down 21% year over year, 19% versus 2024, and 53% versus 2023.
• Week 15 existing-home transactions-8% wow，-11% yoyThe year-to-date average is down 7% year over year, up 22% versus 2024, and roughly flat versus 2023.
• Median new-home sales area so far in April-1% mom，+2% yoyThis shows that the intra-month measure is steadier than weekly registered transactions.
• Median existing-home sales area so far in April+4% mom，-6% yoyThe existing-home market improved month over month within the month, but remains negative year over year.
• Inventory balance-0.3% wow，-3.1% versus end-2025Based on an inventory tracking sample of about 20 cities.
• Inventory months29.3 monthsBelow the March 2026 average of 29.9 months.
• Top-100 developers' April presales implied-9% yoyBased on sales data from roughly 75 cities, improved from -19% in March.
• GSPC completion trackerMarch 2026 down by the mid-teens year over year; full-year 2026E -1% yoyInferred from a flat-glass supply-demand model.
• New-start implicationAbout -20% yoy in March 2026Based on land sales trends in 300 cities and the national cement shipment ratio.
• BEKE 1Q26 GTV-15% yoyOf which new homes were about -28% and existing homes about -10%.
• Covered developer valuationsBoth offshore and onshore at about 0.5x 2026E P/BOffshore trades at a 33% discount to 2026E NAV, and onshore at a 21% discount.

Impact & implications

For investors, the report conveys a signal of recovery from low levels rather than a clear confirmation of a full rebound. Registered transactions are still declining and price expectations are also softening, which means fundamental pressure has not eased; however, the rebound in searches, subscriptions, and viewings, together with inventory months slightly below the March average, may support a short-term trading recovery in developer stocks. Stronger state-owned developers may continue to enjoy a relative advantage thanks to financing, credit, and policy-execution strengths, while private-sector developers and highly leveraged names remain more dependent on sustained sales improvement and stable financing conditions.

Risks

• Registered transactions continue to decline year over year, and the improvement in leading indicators may only be a short-term rebound.
• Expectations for rising existing-home prices have cooled among both brokers and sellers.
• Completion and new-start implications remain weak and may weigh on downstream real estate demand.
• Although developer valuations are low, the discount may persist if sales and financing do not improve.
• If policy support is concentrated in structural areas such as urban renewal, it may not quickly translate into commodity-home transactions.

What to watch

• Whether new-home search activity can maintain week-over-week improvement for several consecutive weeks.
• Whether existing-home subscriptions, viewings, and new-listing pace continue to recover.
• Whether April Top-100 developers' presales narrowing from -19% in March to about -9% actually materializes.
• Whether inventory months continue to stay below the March average.
• Whether Beijing's urban-renewal investment and financing policies prompt more local governments to follow.
• Whether the share-price divergence between stronger state-owned developers and private-sector developers widens further.