China property weekly transactions improved at the margin, but the sell-through rate fell sharply

Overview

This report is Morgan Stanley's weekly database tracker for the China property sector, focusing on primary home registered sales, secondary home registered sales, sell-through rates, listing price tracking indices, and real estate agency indices. For the week ended July 19, 2026, weekly transaction data improved at the margin, especially secondary home sales, which shifted from a YoY decline in the prior week to YoY growth, but year-to-date primary home sales remained in negative growth, indicating that the recovery in sector demand is still uneven.

Core views

The core conclusion is that transaction activity improved in the short term, but the sector overall remains neutral. Primary home sales in 50 cities rose 3% YoY, while secondary home sales in 10 cities rose 6% YoY, with secondary homes showing more stable performance at +4% YoY year to date; however, the overall sell-through rate fell from 95% in the prior week to 26%, and the sell-through rate in tier-1 cities was only 4%, indicating that project mix and regional differences have a significant impact on sales performance. The disclosed Asia Pacific industry view is In-Line, implying a neutral stance versus the benchmark on sector performance over the next 12-18 months.

Analysis framework

The report uses a weekly high-frequency database tracking approach, comparing current-week YoY, prior-week YoY, year-to-date YoY, and divergence across city tiers, while combining sell-through rates, listing price indices, and agency sentiment indices to assess short-term momentum in China's property market. At the stock level, it provides industry coverage context through covered company ratings and price tables, but the main text is not focused on valuation of any single company.

Methodology notes

• high-frequency industry trackingWeekly Database Tracker

  weekly transactions, year-to-date cumulative data, city-tier segmentation, sell-through rate

  By analyzing YoY changes in registered unit sales for primary homes in 50 cities and secondary homes in 10 cities, together with segmentation across tier-1, tier-2, and tier-3 cities and changes in sell-through rates, the report evaluates sales momentum in China's property market.

• relative rating systemMorgan Stanley Stock Ratings

  Overweight, Equal-weight, Underweight, In-Line

  Morgan Stanley uses a relative rating system in which Overweight, Equal-weight, and Underweight represent expected risk-adjusted total returns over the next 12-18 months relative to the industry coverage universe; an industry view of In-Line means sector performance is expected to be broadly in line with the relevant benchmark.

Asset mapping & comparison

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

• China property developer equities

  directly related

  Strengths

  Weekly YoY transaction volumes for both primary and secondary homes improved, with some recovery seen across certain city tiers; some covered companies are rated Overweight.

  Weaknesses

  Year-to-date primary home sales are still down 11% YoY, and the foundation of the sector recovery remains unstable.

  Comparison

  Year-to-date secondary home sales are up 4% YoY, outperforming primary homes; tier-2 primary home sales rose 14% YoY, stronger than the 24% YoY decline in tier-1 cities.

  Risks

  Declining sell-through rates, divergence across city tiers, unsustained sales recovery, and changes in financing and policy conditions.

• Hong Kong-listed mainland property stocks

  highly related

  Strengths

  The report covers Hong Kong-listed developers such as China Resources Land Ltd., China Jinmao Holdings Group Ltd, and Seazen Group Ltd, with some names rated O.

  Weaknesses

  Covered companies also include Equal-weight and Underweight ratings, reflecting differences in company fundamentals and risks.

  Comparison

  Ratings among covered Hong Kong-listed names include O, E, and U, so the weekly sector improvement cannot be directly extrapolated to all companies.

  Risks

  Sales volatility, credit risk, policy adjustments, market liquidity, and valuation discounts.

• A-share property developers

  related

  Strengths

  The report covers A-share names such as China Merchants Shekou Industrial Zone, China Vanke Company Ltd., Gemdale Corporation, Poly Developments and Holdings Group, and Seazen Holdings Company Ltd.

  Weaknesses

  Ratings among covered A-share names are also differentiated, and some companies are rated Underweight.

  Comparison

  Both A-share and Hong Kong-listed property names are affected by China's property transaction trends and policy cycle, but there are clear differences in company ratings, valuation, and liquidity.

  Risks

  Weak sales, margin pressure, asset impairments, and debt refinancing pressure.

Key data

• Weekly registered primary home sales in 50 cities+3% YoYThe prior week was +1% YoY; year to date is -11% YoY.
• Primary home sales in tier-1 cities-24% YoYThe prior week was +40% YoY, indicating high volatility.
• Primary home sales in tier-2 cities+14% YoYThe prior week was +0% YoY.
• Primary home sales in tier-3 cities+2% YoYThe prior week was -18% YoY.
• Weekly registered secondary home sales in 10 cities+6% YoYThe prior week was -3% YoY; year to date is +4% YoY.
• Secondary home sales in tier-1 cities+9% YoYThe prior week was +6% YoY.
• Secondary home sales in tier-2 cities+5% YoYThe prior week was -9% YoY.
• Overall sell-through rate26%The prior week was 95%; tier-1 cities were 4%, and tier-2 cities were 48%.
• Centaline six-city secondary home listing price tracking index16.5%The prior week was 16.3%.
• Tier-1 city real estate agency index52.8The prior week was 51.8.
• Asia Pacific industry viewIn-LineThe table discloses the Asia Pacific Industry View as In-Line.

Impact & implications

The implication for investment judgment is that the marginal improvement in high-frequency sales data helps ease concerns about continued deterioration in sector demand, with secondary homes showing relatively greater resilience; however, the cumulative decline in primary home sales remains, and the sharp drop in the sell-through rate also suggests that project mix, city divergence, and homebuyer confidence remain key constraints. The industry view remains In-Line, indicating that the report is more focused on tracking and validating the quality of the recovery rather than clearly turning positive.

Risks

• Year-to-date primary home sales are still down YoY, and short-term weekly improvement may be insufficient to confirm a trend reversal.
• The overall sell-through rate fell from 95% in the prior week to 26%, suggesting that project quality or regional mix may have materially affected sales performance during the week.
• Primary home sales in tier-1 cities fell 24% YoY, diverging from the performance of tier-2 and tier-3 cities.
• The report discloses that Morgan Stanley has or seeks investment banking and other business relationships with multiple covered companies, and investors should be aware of potential conflicts of interest.
• The research report is based on public information and does not constitute personalized investment advice; ratings and views may change with market and company conditions.

What to watch

• Whether YoY primary home sales in 50 cities can continue turning positive in the coming weeks and drive a narrowing of the year-to-date decline.
• Whether the year-to-date positive growth in secondary home sales across 10 cities can continue and whether it can transmit to primary home demand.
• Whether the sell-through rate can recover from 26%, especially in tier-1 cities after the impact of remote projects.
• Whether the Centaline six-city secondary home listing price tracking index and the tier-1 city real estate agency index continue to improve.
• The impact of policy support, the financing environment for developers, and sales data from key developers on the industry view.