China property sees a short-term rebound driven by strong secondary-home transaction growth, but this is still not enough to confirm a sector bottom

Overview

This report focuses on the investment implications for the China property sector after a strong rebound in secondary-home transaction volume. J.P. Morgan points out that the sector rose 4% on April 14, likely driven by improving real-time secondary-home transactions in the Iceberg Index, improving official lagged contract-signing data, and policy expectations ahead of the Politburo meeting at the end of April. The overall view is that short-term trading opportunities have improved, but this is not yet enough to confirm that the industry has bottomed.

Core views

The core views are: first, improving secondary-home transaction volume is a positive signal, but it is not a new trend, as some first-tier cities have already seen YoY positive growth multiple times since 2023; second, the direction of the Iceberg Index's real-time data is broadly consistent with official contract signings, but the magnitude may differ and should be validated against official data; third, prices, inventory, and developer sales remain weak, indicating that the fundamentals have not yet reached a sustainable stabilization point; fourth, in the near term the sector may outperform on improving transactions and pre-meeting policy trading, but J.P. Morgan currently leans more toward watching for a potential natural stabilization around 2027.

Analysis framework

The report combines high-frequency transaction data, official contract signings, price-leading indicators, inventory clearance metrics, and policy timing windows to assess the industry. The authors compare the Iceberg Index's real-time secondary-home transactions with official secondary-home contract signings in 12 cities, further breaking down primary-home, secondary-home, Shanghai, and first-tier-city performance, and use Centaline's secondary-home listing price index, the National Bureau of Statistics' secondary-home price index, listing volume, and months of inventory to judge whether volume and price are improving in sync.

Methodology notes

• High-frequency property data trackingComparison of Iceberg Index real-time secondary-home transactions and official contract signings

  Use real-time brokerage-channel transaction data to observe the latest market trend, and use official contract signings to validate the direction and magnitude.

  The Iceberg Index captures real-time secondary-home transactions from some brokers and is highly timely; official contract signings reflect actual sales but usually lag by several weeks. The report believes the two move in the same direction, but differences in sample cities, channel representativeness, and the inclusion of guaranteed/rehousing housing can cause magnitude deviations.

• Volume-price-inventory frameworkValidation through transaction volume, price, and inventory

  Only when transactions, prices, and inventory all continue to improve together can they better support a judgment of a natural industry inflection point.

  The report believes that a few weeks of improving transactions are not enough to prove a bottom; only if transactions, prices, and inventory continue to improve over the next few months without policy stimulus is it possible to approach a natural inflection point.

• Event-driven analysisTrading window before the Politburo meeting

  Policy expectations and short covering ahead of government meetings may drive a short-term rebound in the sector.

  The report notes that 2025 experience shows the sector may rise ahead of high-level meetings on speculation about policy support or as a 'just in case' short-covering move, even when market expectations are low.

Asset mapping & comparison

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

• CR Land

  Top pick

  Strengths

  Listed as one of J.P. Morgan's top picks in China property, reflecting a relatively high preference.

  Weaknesses

  The report does not provide detailed company-level financial or target price justification.

  Comparison

  Compared with high-beta names, it looks more like a core preferred holding.

  Risks

  Weak industry prices and unresolved inventory may weigh on valuation recovery.

• CR Mixc

  Top pick

  Strengths

  Listed as a top pick and may benefit from resilience in commercial property operations and consumer-related scenarios.

  Weaknesses

  The report does not expand on company-specific valuation.

  Comparison

  Together with CR Land, it forms the report's preferred pair.

  Risks

  If property-chain sentiment weakens or consumer/commercial operations underperform expectations, performance may come under pressure.

• COLI

  High-beta SOE name

  Strengths

  The report believes SOEs may exhibit higher beta.

  Weaknesses

  High beta means it is more sensitive to sector sentiment and policy expectations.

  Comparison

  Compared with CR Land and CR Mixc, it may have greater upside elasticity.

  Risks

  If transaction improvement is not sustainable or policy expectations disappoint, downside risk is larger.

• Jinmao

  High-beta SOE name

  Strengths

  The report believes it may have relatively high beta among SOEs.

  Weaknesses

  The report does not provide company-level fundamental detail.

  Comparison

  It belongs to the same SOE elasticity theme mentioned in the report as COLI.

  Risks

  If the sector rebound is driven only by short-term sentiment, sustainability remains uncertain.

• Longfor

  High-beta private developer name

  Strengths

  The report believes Longfor may have relatively high beta among private developers.

  Weaknesses

  Private property stocks are usually more sensitive to financing conditions, sales recovery, and risk appetite.

  Comparison

  Compared with high-beta SOE names, its private-sector nature may bring greater volatility.

  Risks

  If policy support is limited or sales recovery slows, share-price elasticity could work in reverse.

• KE Holdings (BEKE/2423.HK)

  Direct beneficiary of improving secondary-home transactions

  Strengths

  If secondary-home transaction volume improves sustainably, it will directly benefit its transaction services business; the report discloses both BEKE and 2423.HK as OW.

  Weaknesses

  The upside depends on the sustainability of the improvement in secondary-home transactions.

  Comparison

  Compared with developers, KE Holdings has a more direct business linkage to improving secondary-home transaction volume.

  Risks

  The reliability of Iceberg Index data and the sustainability of official transaction improvement still need to be verified.

Key data

• China property sector performance on Apr 14+4%HSI rose 1% over the same period.
• Iceberg Index real-time secondary-home transactions in key citiesUp 36% YoY so far in AprilMarch was up 17% YoY; the report warns that this should be interpreted with caution.
• Primary-home contract signings in 19 citiesDown 13% YoY year to date; up 15% YoY so far in AprilOfficial contract signings reflect transactions but lag by several weeks.
• Secondary-home contract signings in 12 citiesDown 0.5% YoY year to date; up 12% YoY so far in AprilOfficial secondary-home transaction data has improved recently.
• Shanghai secondary-home salesUp 4% YoY year to date; up 23% YoY so far in AprilPartly influenced by the short-term reaction after the easing of purchase restrictions at the end of February.
• Beijing secondary-home salesUp 11% YoY in 2023; up 10% YoY in 2024This shows that YoY positive growth in secondary-home transactions is not a new trend.
• Shenzhen secondary-home salesYoY +50%/+69%/+6% in 2023/2024/2025, respectivelyFirst-tier-city secondary-home transactions had already shown stage-by-stage improvement.
• Months to clear inventory24 months for primary homes; 18 months for secondary homesInventory remains high, constraining a sustainable price stabilization.
• Secondary-home listings+4% in MarchMore listings create pressure on prices.

Impact & implications

The investment implication is that the sector has short-term trading rebound potential, especially for high-beta property stocks and brokerage platforms directly driven by secondary-home transaction volume; however, medium-term allocation still needs to wait for improvements in prices and inventory. The report prefers CR Land and CR Mixc because of their stronger asset quality, while also seeing COLI, Jinmao, and Longfor as potentially more elastic in a rebound.

Risks

• The Iceberg Index's real-time data and official contract signings differ in sample cities, data sources, and statistical methodology, which may overstate or understate the true degree of improvement.
• YoY growth in secondary-home transactions is not a new trend, and a short-term improvement in transactions alone cannot prove that the industry has bottomed.
• Home prices may weaken again in March and April, and Centaline's first-tier-city secondary-home listing price index shows downward pressure.
• The inventory clearance cycle remains high at 24 months for primary homes and 18 months for secondary homes, limiting recovery in prices and developer sales.
• Shanghai's April improvement in transactions was partly driven by the short-term reaction after purchase restrictions were eased, and sustainability remains to be seen.
• If policy expectations linked to the Politburo meeting at the end of April are not met, the short-term rebound may retrace.

What to watch

• Whether secondary-home transaction volume can continue to improve over the next few months without additional policy stimulus.
• Whether the direction and magnitude of official 12-city secondary-home contract signings continue to match the Iceberg Index's real-time data.
• Whether the first-tier-city secondary-home listing price index and the National Bureau of Statistics' secondary-home price index stabilize.
• Whether the months needed to clear primary-home and secondary-home inventory decline.
• Whether developer sales improve in sync.
• Whether the Politburo meeting at the end of April releases signals of property support and whether the market shows a policy surprise.
• Whether transaction improvements in leading cities such as Shanghai can continue after the easing of purchase restrictions.