China property market Report Interpretation

Overview

This weekly China property update assesses transaction volumes, leading demand indicators, inventory, construction activity, policy developments and developer valuations. Goldman Sachs sees a marginal volume recovery but describes mixed leading indicators and continued weakness in the broader development cycle.

Core views

Transaction activity improved in Week 33, but the report does not view the rebound as a clean strengthening of demand. Primary-market gross floor area sold rose 7% week on week and was still down 6% year on year across about 75 cities. Secondary transactions increased 6% week on week and 8% year on year across about 20 cities; secondary subscription sales, which the report says lead registration-based sales by one to two weeks, increased 2% week on week. Beijing outperformed other Tier-1 cities after the August 7 easing policy, with primary and secondary volumes up 4% and 13% week on week. News reports also pointed to increased new-project visits in non-core districts. The leading indicators were less constructive than the volume data. New-home search activity declined 0.2% week on week, while secondary visitation and new-listing supply held at the preceding week's levels. Secondary transaction prices fell 2% week on week. The Iceberg Index showed Beijing secondary prices down 0.2% week on week, compared with a 0.1% nationwide decline. Centaline's Salesman Index fell 0.3 percentage points week on week, although it was 3.0 percentage points higher year on year; its Seller Asking Index fell 0.1 percentage points week on week and 5.3 percentage points year on year. Goldman Sachs interprets these measures as evidence that agents' and sellers' expectations for price appreciation were edging lower. Monthly and year-to-date comparisons underline the uneven recovery. In August month-to-date, median primary GFA sold was down 29% month on month and 23% year on year, while secondary GFA sold was down 11% month on month but up 2% year on year. Year to date, average primary GFA sold was down 12% year on year and 18% and 39% below the 2024 and 2023 levels, respectively. Secondary GFA sold was up 2% year on year and 14% and 13% above the 2024 and 2023 levels. Property sales in about 75 cities suggested that top-100 developers' contract sales would fall about 9% year on year in August, versus an 8% decline in July. Inventory improved modestly but remained elevated in absolute terms. Inventory balance declined 0.8% week on week and was 7.3% below the end-2025 level. Inventory months stood at 27.4, versus averages of 27.5 in June and 27.1 in July 2026; the report also describes inventory months as flat week on week and 2.1% below end-2025. This indicates some stock reduction, but not a material normalization in the months-of-inventory measure. Construction-related indicators continued to point to contraction. Goldman Sachs' Property Completion tracker, derived from its China float-glass supply-demand outlook and weekly float-glass demand model, indicated a high-teen year-on-year decline in August completions. This compares with a 19% year-on-year decline reported by the NBS and a high-teen decline estimated by Goldman Sachs Economics for July; Goldman Sachs Economics forecasts a 15% year-on-year decline in FY26E completions. New starts were expected to post a high-twenties year-on-year decline in August, based on land-sales trends in 300 cities and a nationwide cement-shipment ratio that declined 5.2 percentage points week on week to 37.3%. BEKE's new and existing-home GTV was estimated to have risen 5% year on year in 2Q26, driven by a 23% fall in new-home GTV and a 17% increase in existing-home GTV; July through mid-August GTV was estimated up 7%, with new and existing segments up 8% and 7%. On equities, stronger SOE developers outperformed. Their share prices rose 2% week on week on average, led by CMSK at 5%, CR Land at 3% and Jinmao at 3%, while other developers declined 3% on average. Offshore covered developers were flat week on week against a 4% decline for MSCI China, and onshore coverage declined 1% against a 1% gain for the CSI 300. Goldman Sachs notes that offshore and onshore coverage each traded at 0.5x 2026E P/B, alongside average discounts to end-2026E NAV of 35% and 30%. It compares offshore valuation with prior downturn troughs of 39%/0.7x in 2H2008, 73%/0.9x in 2H2011 and 58%/0.9x in 1H2014; onshore valuation is compared with 67%/1.6x, 64%/1.5x and 61%/1.2x, respectively. The report therefore frames current P/B levels as being at downturn troughs, while differentiating stronger SOE developers from weaker-performing peers.

Analysis framework

Goldman Sachs combines weekly primary and secondary transaction trackers with search, visitation, listing, price-expectation and inventory indicators to assess demand momentum. It then uses land sales, cement shipments and a proprietary float-glass supply-demand model to infer construction activity, and compares covered developers' share-price performance and 2026E NAV and P/B valuations.

Methodology notes

• Industry AnalysisSupply-demand framework

  Weekly property-market and float-glass supply-demand tracking

  The report uses transaction, inventory, land-sales and construction-material indicators to judge housing demand and infer completion and new-start trends.

• Valuation methodsPB valuation

  2026E price-to-book comparison

  The report compares covered developers' forward P/B multiples with prior downturn troughs to place current equity valuations in historical context.

• Valuation methodsNAV (Net Asset Value)

  Discount to end-2026E NAV

  Goldman Sachs measures each coverage universe's market value relative to estimated end-2026 net asset value to describe valuation discounts.

Asset mapping & comparison

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

• CMSK (001979.SZ)

  Covered stronger SOE developer; outperformed in Week 33.

  Strengths

  Share price rose 5% week on week.

  Comparison

  Outperformed the stronger-SOE coverage average of +2% week on week.

• CR Land (01109.HK)

  Covered stronger SOE developer.

  Strengths

  Buy-rated; share price rose 3% week on week.

  Comparison

  Outperformed the stronger-SOE coverage average.

• Jinmao (00817.HK)

  Covered stronger SOE developer.

  Strengths

  Buy-rated; share price rose 3% week on week.

  Comparison

  Outperformed the stronger-SOE coverage average.

• Poly (600048.SH)

  Covered stronger SOE developer.

  Weaknesses

  Share price declined 3% week on week.

  Comparison

  Underperformed the stronger-SOE coverage average.

• Greentown (03900.HK)

  Covered developer in the stronger-developer group.

  Strengths

  Share price rose 2% week on week.

  Comparison

  Matched the stronger-SOE group average.

• Longfor (00960.HK)

  Covered other developer.

  Weaknesses

  Neutral-rated; share price declined 2% week on week.

  Comparison

  Part of the weaker other-developer group, which declined 3% on average.

• Seazen (01030.HK)

  Covered other developer.

  Weaknesses

  Sell-rated; share price declined 2% week on week.

  Comparison

  Part of the weaker other-developer group.

• Vanke (000002.SZ; 02202.HK)

  Covered other developer.

  Weaknesses

  Both A and H shares were Sell-rated; A shares fell 4% and H shares fell 5% week on week.

  Comparison

  Underperformed the stronger-SOE group.

Key data

• Primary-market GFA sold, Week 33+7% wow; -6% yoyAcross approximately 75 cities.
• Secondary transactions, Week 33+6% wow; +8% yoyAcross approximately 20 cities.
• Primary GFA sold, YTD-12% yoyAlso 18% below 2024 and 39% below 2023.
• Secondary GFA sold, YTD+2% yoyAlso 14% above 2024 and 13% above 2023.
• Inventory months27.4Versus 27.5 in June and 27.1 in July 2026.
• FY26E completions forecast-15% yoyGoldman Sachs Economics estimate.
• Covered developer valuation0.5x 2026E P/BAverage for both offshore and onshore coverage; discounts to end-2026E NAV were 35% and 30%, respectively.

Impact & implications

The report indicates that transaction volumes have improved at the margin, particularly in Beijing and the secondary market, but falling searches, prices and price expectations leave the demand signal mixed. Continued declines in sales, starts and completions point to an ongoing weak construction cycle, while equity performance and valuations favor a relative distinction between stronger SOE developers and other developers.