July Property Data Remain Weak, While Tier-1 City Home Prices Show Resilience
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July Property Data Remain Weak, While Tier-1 City Home Prices Show Resilience
JPMorgan expects nationwide new-home sales to continue declining in FY26, but home prices in Tier-1 cities led by Shanghai are likely to stabilize moderately, and recommends focusing on SOE developers with Tier-1 city exposure and sales advantages.
- The month-on-month decline in new-home prices across 70 cities widened from -0.15% in June to -0.18% in July, but Tier-1 city new-home prices still rose 0.05% month on month, marking the sixth consecutive monthly increase.
- The month-on-month decline in existing-home prices across 70 cities narrowed from -0.32% to -0.29%; existing-home prices in Tier-1 cities rose 0.22% month on month, the fifth consecutive monthly increase.
- The year-on-year decline in July residential sales value narrowed from -12% to -9%, but remained 63% below the 2018–2021 average for the same period, indicating that the fundamental recovery remains fragile.
- Housing starts, completions, and real estate development investment continued to face pressure, while supply contraction may provide some support for stabilizing home prices.
- Investors are advised to watch SOE developers such as COLI, CR Land, and Jinmao, which are relatively ahead in sales and benefit from Tier-1 city market resilience.
Report interpretation
Overview
National Bureau of Statistics July property data show that sales and construction activity remained broadly weak, while residential prices in Tier-1 cities retained relative resilience. JPMorgan believes nationwide new-home sales value will remain on a downward trend in FY26, while home prices in Tier-1 cities will stabilize moderately, with Shanghai potentially performing better.
Core views
The report's core conclusion is that the property sector has not yet entered a broad-based recovery, with demand, housing starts, and investment all weak. However, consecutive positive price growth in Tier-1 cities, declining existing-home listings, and contracting housing starts are improving supply-demand balance in core cities. Investment selection should favor SOE developers that outperform the sector in sales and have higher Tier-1 city exposure.
Analysis framework
Based on NBS data on home prices in 70 cities, nationwide sales, construction, and real estate investment, combined with Centaline's Tier-1 city existing-home price index, CREIS land sales, and high-frequency new-home sales data for 20 cities, the report cross-validates trends in prices, sales, supply, and investment and derives its FY26 forecasts accordingly.
Methodology notes
Observes monthly price changes by new versus existing homes and city tier
Used to identify divergence between nationwide and Tier-1 city home prices, as well as the persistence of price stabilization.
Analyzes sales, land, housing starts, completions, and inventory in conjunction
Used to assess the impact of weak demand, supply contraction, and inventory on subsequent home prices and sector activity.
Combines official, brokerage, and land-market data
Used to supplement official monthly data and validate changes in existing-home and land markets in core cities.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- China Overseas Land & Investment (0688.HK)Listed in the report as one of the preferred names to continue holding
- Strengths
- An SOE developer with sales performance expected to outperform the sector and favorable Tier-1 city exposure.
- Weaknesses
- Overall new-home sales in the sector remain in decline, and company performance is still affected by weak aggregate demand.
- Comparison
- Compared with the sector average, it better fits the report's preferred profile of leading sales and high Tier-1 city exposure.
- Risks
- Core-city price stabilization falls short of expectations, nationwide sales continue to deteriorate, or policy support proves insufficient.
- China Resources Land (1109.HK)Listed in the report as one of the preferred names to continue holding
- Strengths
- An SOE developer benefiting from Tier-1 city price resilience and relatively robust sales competitiveness.
- Weaknesses
- It remains exposed to the nationwide downcycle in real estate investment, housing starts, and sales.
- Comparison
- Compared with general developers, it offers greater defensiveness and stronger exposure to benefits from core cities.
- Risks
- Slower sales absorption, renewed weakness in home prices, and sector liquidity and policy risks.
- China Jinmao (0817.HK)Listed in the report as one of the preferred names to continue holding
- Strengths
- Has an SOE background and fits the report's selection criteria of sales outperformance and Tier-1 city exposure.
- Weaknesses
- Aggregate sector demand remains weak, and the pace of improvement depends on the degree of market stabilization in core cities.
- Comparison
- Compared with developers with greater lower-tier city exposure, it is more likely to benefit from improvement in core cities.
- Risks
- A delayed market recovery, sales performance below expectations, and changes in land and financing conditions.
Key data
- MoM Change in New-Home Prices Across 70 Cities-0.18%In July 2026, the decline widened from -0.15% in June.
- MoM Change in Tier-1 City New-Home Prices+0.05%The sixth consecutive monthly increase; Shanghai and Shenzhen were both +0.2%, while Beijing was -0.3%.
- MoM Change in Existing-Home Prices Across 70 Cities-0.29%In July 2026, the decline narrowed from -0.32% in June.
- MoM Change in Tier-1 City Existing-Home Prices+0.22%The fifth consecutive monthly increase; Guangzhou, Shanghai, and Shenzhen recorded positive growth, while Beijing was flat.
- YoY Change in July Residential Sales Value-9%The decline narrowed from -12% in June, but remained 63% below the 2018–2021 average for the same period.
- FY26 Forecast: Housing Starts-22%The report forecasts full-year housing starts area to decline 22% year on year.
- FY26 Forecast: Completions-20%The report forecasts full-year completed floor area to decline 20% year on year.
- FY26 Forecast: Real Estate Development Investment-15%The report forecasts full-year real estate development investment to decline 15% year on year.
Impact & implications
Weak sector fundamentals constrain a broad valuation recovery, but moderate home-price stabilization and supply contraction in core cities support structural opportunities. Relatively speaking, SOE developers with stronger sales execution and assets and projects concentrated in Tier-1 cities are more likely to outperform the sector; companies with higher exposure to lower-tier cities or reliance on a rebound in aggregate sector demand remain under considerable pressure.
Risks
- The nationwide new-home sales downturn lasts longer than expected, weighing on developers' cash flow and profitability.
- Positive home-price growth in Tier-1 cities fails to persist, or reverses as price weakness in cities such as Beijing broadens.
- Existing-home prices continue to diverge from the Centaline index, indicating that the foundation for market stabilization remains fragile.
- Persistently weak land sales volumes may suppress subsequent investment, housing starts, and sector confidence.
- Uncertainty remains regarding the scale of policy easing, its implementation effectiveness, and the release of homebuyer demand.
- The companies covered by the report and J.P. Morgan have market-making, client relationships, potential investment-banking compensation, and other disclosure matters; conflicts-of-interest disclosures should be noted.
What to watch
- Whether new-home and existing-home prices in Tier-1 cities can sustain positive month-on-month growth, particularly in Shanghai, Shenzhen, and Beijing.
- Whether year-on-year growth in high-frequency new-home sales across 20 cities in August can translate into improvement in nationwide sales data.
- Whether existing-home listings continue to decline, validating progress in supply-demand rebalancing.
- Whether the gap between nationwide residential sales value and the 2018–2021 average narrows.
- The magnitude of declines in housing starts, completions, real estate development investment, and land transaction volumes across 300 cities.
- Subsequent property-support policies and their transmission effects on transaction volumes and home prices in core cities.