Mainland property leading indicators weaken, while Hong Kong primary sales remain robust

Overview

This report is JPMorgan's weekly data monitor for Mainland China and Hong Kong real estate and conglomerates. The core conclusion is that Mainland property leading indicators remain soft, with the Centaline secondary-listing price index in first-tier cities and the manager confidence index both declining; however, the short-term improvement in sales registrations partly reflects a low base and holiday timing effects. In Hong Kong, the residential market remains resilient, with home prices, bank valuations and sales sentiment indicators still strong, and primary transactions reaching a 10-year high over the Easter long weekend.

Core views

For the Mainland market, the Centaline first-tier-city secondary-listing price index fell from 19.8 to 19.6, remaining roughly flat for four consecutive weeks; the manager confidence index dropped from 58 to 56, indicating weaker leading indicators. Sales showed short-term y/y improvement, but year-to-date primary and secondary sales are still weak. In Hong Kong, the Centa-City Leading Index rose 0.9% w/w, CVI remained at a high 80.4, and CSI increased to 70.4, all pointing to continued upside momentum in prices and sentiment. On the credit side, the JACI China HY Property Index rebounded, but Vanke's liquidity and debt maturities remain the main risk points, while Greentown China has relatively healthy fundamentals but is viewed as fairly valued.

Analysis framework

The report uses a weekly high-frequency data tracking framework, combining Mainland primary and secondary sales registrations, Centaline price and confidence indicators, Hong Kong home prices and valuation/sales sentiment indicators, primary project sell-through, southbound holdings, sector share performance, as well as the credit bond index and issuer fundamentals, to assess regional property conditions, relative stock performance and credit risk.

Methodology notes

• Leading indicatorsCentaline secondary-listing price index and manager confidence index

  High-frequency leading signals for Mainland home prices and broker confidence

  The report uses the first-tier-city secondary-listing price index and the manager confidence index to observe Mainland property market momentum; declines in the indices are interpreted as weaker leading indicators.

• Sales tracking60-city primary sales registrations and 12-city secondary sales registrations

  Weekly transaction registrations versus year-to-date performance

  By comparing weekly y/y and year-to-date y/y figures, the report distinguishes low-base distortions from the true trend and notes that primary sales improved y/y in the short term but remained down year to date.

• Hong Kong property leading indicatorsCenta Valuation Index and Centa Salesman Index

  Bank valuation upgrades and frontline sales sentiment

  A CVI above 60 indicates that banks are raising property valuations, while an CSI above 50 indicates positive sentiment and the potential for home prices to keep rising; this period's CVI was 80.4 and CSI was 70.4.

• Market performanceSouthbound holdings and weekly sector share performance

  Tracking capital flows and relative returns

  The report uses weekly changes in southbound holdings and sector performance versus the HSI to identify funding preference and stock strength.

• Credit analysisCredit fundamentals and relative valuation framework

  Cash, leverage, short-term debt coverage, maturity wall and yield valuation

  The report evaluates issuer repayment capacity using net debt ratios, short-term debt cash coverage, free cash flow and bond maturity pressure, and then assesses whether valuation is fair based on yield and spreads.

Asset mapping & comparison

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

• Mainland China property stocks

  Sector allocation and stock selection

  Strengths

  Short-term y/y sales in 60 cities for primary and 12 cities for secondary homes improved, and some leading names such as CR Land, CR Mixc and Jinmao were listed as top picks.

  Weaknesses

  Leading indicators have weakened, year-to-date primary sales in 20 cities are still down 14%, and year-to-date secondary sales in 12 cities are still down 2%.

  Comparison

  The Mainland property sector rose 1% last week, but underperformed the HSI's +2%.

  Risks

  The short-term y/y improvement driven by a low base may be overstated, and the sustainability of the sales recovery is insufficient.

• Hong Kong property developers

  Beneficiary of residential sales and price momentum

  Strengths

  Primary sales remain strong, with about 330 transactions over the Easter long weekend, a 10-year high, and the home price index rose 0.9% w/w.

  Weaknesses

  Transactions at the 35 major second-hand housing estates fell 19% w/w, partly due to the Easter holiday.

  Comparison

  The Hong Kong property and conglomerates sector rose 3% last week, outperforming the HSI's +2%.

  Risks

  If new-project sell-through slows or geopolitical tensions affect demand, current price momentum may weaken.

• Hong Kong rental stocks and conglomerates

  Coverage universe for JPMorgan stock picks

  Strengths

  Swire Prop, Hang Lung, JM and CKH were all listed as top picks, and the sector showed relatively strong performance.

  Weaknesses

  Different sub-sectors have different sensitivities to rents, consumption, interest rates and asset value changes.

  Comparison

  NWD rose 6% last week, while Swire Prop, Fortune, Kerry and CKH all rose 4%.

  Risks

  Interest rates, consumption recovery and the pace of asset revaluation may affect valuation recovery.

• China high-yield property credit bonds

  Tracking credit risk and relative valuation

  Strengths

  The JACI China HY Property Index rose 0.8% last week, and the year-to-date return turned to +0.8%.

  Weaknesses

  Industry credit differentiation remains significant, and weaker issuers face repayment and refinancing pressure.

  Comparison

  It outperformed the China HY index's +0.4% last week.

  Risks

  A liquidity event at a single issuer could drag on the index and risk appetite.

• Vanke

  Key credit risk monitoring target

  Strengths

  Free cash flow turned from -Rmb4bn in 3Q25 to +Rmb6bn in 4Q25.

  Weaknesses

  2025 net loss widened to -Rmb89bn, net debt ratio rose to 124%, and short-term debt cash coverage fell to 0.42x.

  Comparison

  Compared with Greentown, which has a healthier balance sheet, Vanke's short-term maturity pressure is more pronounced.

  Risks

  At least Rmb10bn of domestic bonds mature between April and July, so repayment arrangements under tight liquidity need close monitoring.

• Greentown China

  Relatively stable credit fundamentals but neutral valuation

  Strengths

  Cash is about Rmb60bn, short-term debt cash coverage is 2.6x, and the company is seen as able to handle the Rmb10bn and Rmb6.5bn bond maturities in 2026/27 with relative ease.

  Weaknesses

  2025 net profit fell 95% y/y to Rmb71mn, affected by lower development-property margins, reduced contributions from associates and JVs, and asset impairments.

  Comparison

  GRNCH '28s were quoted at 101.5, with a yield of 7.6% and z+387, and are considered fairly valued.

  Risks

  If margins continue to decline or asset impairments widen, the fundamental cushion may narrow.

Key data

• Mainland 60-city primary sales registrations+24% Y/YLast week was -8% Y/Y; the strong y/y figure partly reflects the low base from the 2025 Qingming holiday.
• Mainland 20-city primary sales YTD-14% Y/YThis shows that the short-term y/y rebound has not changed the still-weak year-to-date trend.
• Mainland 12-city secondary sales registrations+28% Y/YLast week was +0.6%; year-to-date 12-city secondary sales were -2% Y/Y.
• Hong Kong home price index+0.9% W/WHome prices have already risen 6% in 1Q26, leaving only 4 percentage points to the full-year forecast of 10-15%.
• Hong Kong CVI80.4Last week was 84.4; above 60 indicates banks are raising property valuations, pointing to a likely continuation of home price growth.
• Hong Kong CSI70.4Last week was 68.5; above 50 indicates positive market sentiment.
• Hong Kong Easter long-weekend primary transactionsAbout 330 dealsDeals over the March 3 to 7 long weekend reached a 10-year high.
• La Mirabelle I second batch168 units, 90% soldPrice was HK$16.6K psf, 6% above the previous batch and 4% above the secondary market.
• La Mirabelle I third batch plan261 units, ASP HK$17K psf3% above the previous batch and 7% above the secondary market.
• JACI China HY Property Index+0.8% W/W, YTD +0.8%It outperformed last week's China HY return of +0.4%.
• Vanke 2025 net loss-Rmb89bnIt was -Rmb49bn in 2024; net debt ratio rose from 81% to 124%, and short-term debt cash coverage fell from 0.55x to 0.42x.
• Greentown China 2025 net profitRmb71mn, down 95% y/yCash is about Rmb60bn, with short-term debt cash coverage of 2.6x; GRNCH '28s are maintained at Neutral.

Impact & implications

The investment implication of the report is that regional and asset-class divergence is widening: Mainland property sales and leading indicators are still not strong enough to support a broad recovery trade, so investors should prioritize leading developers with stronger sales resilience and more stable funding; Hong Kong residential property is supported by prices, valuations and primary sell-through, and near-term stock performance is outperforming the HSI; on the credit side, although the high-yield property index has rebounded, issuer-specific liquidity risks still need to be separated carefully, especially Vanke's maturity wall and Greentown's valuation appeal.

Risks

• The improvement in Mainland sales may be driven by a low base and holiday timing effects, and may not represent a true demand recovery.
• Weakening Mainland leading indicators may signal pressure on home prices and transactions ahead.
• Strong Hong Kong primary transactions may be dependent on a few projects and a short holiday window, so sustainability needs to be tested.
• Vanke's near-term debt maturity wall and declining cash coverage create liquidity risk.
• Geopolitical tensions, changes in interest rates and weak macro demand may affect Hong Kong and Mainland property valuations.
• Changes in southbound fund holdings and sector rotation may increase short-term share price volatility.

What to watch

• Whether the Centaline first-tier-city secondary-listing price index in Mainland China continues to hover at low levels or decline.
• Whether the Mainland manager confidence index can rebound from 56 and support a pickup in transactions.
• Whether the year-to-date y/y declines in 60-city primary sales and 12-city secondary sales can narrow.
• Whether Hong Kong CVI stays above 60 and CSI stays above 50.
• Pricing premiums and sell-through rates for new launches such as La Mirabelle I's third batch and Double Coast III.
• Vanke's repayment and refinancing arrangements for domestic bonds maturing between April and July.
• Whether Greentown China's bond spreads continue to reflect fair value or offer a better risk-reward profile.