Mainland real-time secondary transactions strengthened, while Hong Kong new-project sell-through diverged to 100% and 2% due to pricing differences

Overview

This is a weekly data monitor covering the Mainland China and Hong Kong real estate markets, related equities, and credit bonds. The report's core view is that real-time secondary transactions in Mainland China have improved, but official registrations and price-confidence indicators remain unstable; Hong Kong home prices continue to rise, yet new-project sell-through has become extremely polarized due to relative pricing. The report also analyzes the costs and potential profits of the Hung Shui Kiu pilot project and updates equity performance, southbound shareholdings, and credit bond performance.

Core views

High-frequency transaction indicators for Mainland secondary housing improved. Real-time secondary transactions across nine cities increased 7% year over year, above the previous week's 1%; tier-one cities grew 8% year over year, versus a 3% decline previously, with Beijing up 12% year over year. The report specifically notes that this real-time indicator typically leads official registrations by several weeks, so the improvement may not yet be fully reflected in official data. However, current official data remain weak: primary-market registrations across nineteen cities fell 8% year over year, versus 2% growth previously, with only tier-one cities performing well at 13% year-over-year growth; secondary-market registrations across twelve cities fell 1% year over year, versus 10% growth previously. The divergence between high-frequency and official indicators means that subsequent registration data are still needed to confirm whether a sustained recovery is taking shape. Mainland leading indicators present a combination of “slightly recovering transactions, but still-weak confidence and prices.” The tier-one-city property-viewing index rose from 21 to 22, within the report's defined “recovery” range of 20 to 40; only readings below 20 indicate stagnation. The broker manager confidence index fell from 51 to 50, with divergent city performance: Shanghai rose from 46 to 51, while Guangzhou fell from 48 to 43. In asking prices, the Centaline tier-one-city asking-price index declined from 15.2 to a record low of 15.1; the Bingshan asking-price index was flat month over month, versus a 0.1% decline in the prior week. On the supply side, secondary listings across ten cities increased 0.2% month over month, but tier-one cities declined 1.2%, including decreases of 3.2% in Beijing and 0.8% in Shanghai. Secondary listings have fallen by approximately 6% cumulatively since their March peak; the report views the reduction in listings as a signal that may help stabilize home prices. Mainland property stocks outperformed the broader market, although individual-stock performance varied significantly. The sector rose 1% last week, compared with a 0.2% gain in the Hang Seng Index; Country Garden rose 13%, China Overseas Property Holdings gained 9% due to a dividend increase, and China Overseas Land & Investment fell 1%. Southbound ownership increased 0.66% week over week, including increases of 1.4% for China Jinmao, 1.3% for Sunac China, and 1.2% for Greentown China. JPMorgan's top Mainland stock picks are China Overseas Land & Investment, China Resources Land, China Jinmao, and China Resources Mixc Lifestyle. Hong Kong's primary residential market demonstrates extremely strong price sensitivity. China Resources Land launched the first 180 units of The Sterling in West Kowloon at HK$18.4K per square foot, attracting 47,000 subscriptions, equivalent to 254 times oversubscription, and all units were sold. The third price list is priced at HK$19.2K per square foot, 2% above the second price list but still 24% below the secondary market, with sales scheduled for August 29; the report expects the developer to gradually raise prices to HK$21K to HK$22K per square foot in subsequent batches. In contrast, Phase 2 of Park Silicon in Kwu Tung first raised the average selling prices of 16 unsold units by 1% to 7%, then launched a second batch of 58 units at HK$18.0K per square foot, 18% above the local secondary market. Only 1 unit was sold at launch, representing a 2% sell-through rate. The report believes aggressive pricing will result in very weak subsequent sales momentum. The second price list for Sino Land-led La Mirabelle II covers 129 units at an average HK$17.8K per square foot, 9% and 3% above the previous price list and the secondary market, respectively; another 148 units are scheduled for sale on August 28. Price performance in Hong Kong's secondary residential market remains strong, but transaction volume has not yet fully recovered. Transactions across 35 major housing estates totaled 53 units for the week, up 33% week over week but still down 35% year over year; weekend property-viewing appointments across 15 estates increased 3% week over week and 2% year over year. The home-price index again rose 0.6% week over week, reaching its highest level since the fourth quarter of 2023; home prices have risen 13% year to date, reaching JPMorgan's original full-year target range of 10% to 15%. The report therefore expects upward momentum to slow during the remainder of the year. The Centaline Valuation Index edged down from 73.4 to 73.3, indicating that the leading valuation indicator did not continue rising in tandem. The first large-scale land-disposal pilot project in the Hung Shui Kiu/Ha Tsuen New Development Area was awarded to a consortium of six companies, including China Overseas Land & Investment, China Merchants Land under China Merchants Shekou, China Resources Land, China Tourism Group, JD.com, and Sino Land. The winning bid was HK$1.03 billion, with total investment estimated at HK$16.8 billion. The project includes three residential sites comprising 3,120 units and 1.82 million square feet of total residential gross floor area, as well as an enterprise and technology park led by JD.com. The consortium must also construct another two enterprise and technology parks and a government-facilities site and return them to the government by the end of 2028. Based on the total gross floor area of the residential and enterprise technology parks operated by the consortium, the land cost is only HK$435 per square foot, but the total development cost is approximately HK$7.1K per square foot. Compared with the latest average secondary-market price of HK$10K to HK$11K per square foot in Hung Shui Kiu, the report estimates that the project margin could exceed 30%, assuming costs are allocated proportionally between development and non-development projects. Hong Kong tourism and related equity data also remained positive. Visitor arrivals to Hong Kong increased 6% year over year and 3% month over month. Hong Kong property and conglomerate stocks rose 3% last week, compared with a 0.2% gain in the Hang Seng Index; Henderson Land rose 6% after its first-half 2026 results exceeded expectations, Sino Land rose 5%, and Champion REIT fell 3%. Overall southbound ownership declined 0.02% month over month, with MTR and New World Development each rising 0.1% and Hysan Development falling 0.5%. JPMorgan's top Hong Kong developer and landlord picks are Swire Properties, Wharf Real Estate Investment Company, Link REIT, and Hongkong Land, while its top conglomerate picks are CK Hutchison and Jardine Matheson. In the credit market, the JACI China High Yield Property Index fell 0.62% last week, underperforming the 0.17% decline in the China High Yield Bond Index, ending several weeks of gains and reducing its year-to-date return to 10.9%. Fitch affirmed Hysan Development's BBB rating and stable outlook, expecting its retail rental income to remain resilient with support from positive rental reversions, while office income should stabilize as leasing demand improves; continued asset recycling and incremental earnings contributions from Lee Garden Eight beginning in the fourth quarter of 2026 are expected to support further deleveraging. JPMorgan stated that this assessment is consistent with its own view and is positive on Hysan as a beneficiary of Hong Kong's commercial real estate recovery; it maintains an overweight view on Hysan's 7.2% perpetual bond and considers it a carry strategy with a 5.7% yield to call. Other top credit bond picks include New World Development's 10.131% perpetual bond, with an offer price of 101.4 and yield to maturity of 10.7%; New World Development's 12.179% perpetual bond, with an offer price of 98.4 and yield to maturity of 13.8%; Hysan's 7.2% perpetual bond, with an offer price of 105.4 and yield to call of 5.7%; and Longfor's 2029 bond, with an offer price of 86.3 and yield to maturity of 9.2%.

Analysis framework

The report first compares real-time transactions across nine cities with official primary-market registrations across nineteen cities and secondary-market registrations across twelve cities to identify differences between high-frequency indicators and lagging data; it then combines property-viewing activity, broker confidence, asking prices, and listing volumes to assess changes in Mainland market demand, expectations, and supply. The Hong Kong section explains differences in sell-through by comparing new-project pricing premiums or discounts with secondary-market prices and cross-validates market momentum using secondary transactions, appointment volumes, home prices, and valuation indices. The report then estimates the potential profit margin of the Hung Shui Kiu project based on land and development costs versus nearby selling prices, and finally forms asset-level top-pick lists using equity performance, southbound shareholdings, credit indices, bond quotations, and issuers' credit fundamentals.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-demand monitoring through transactions, property viewings, listing volumes, and prices

  The report uses transaction and property-viewing volumes to measure demand, listing volumes to measure available supply, and then observes changes in asking prices and home prices to determine whether the real estate market is recovering, stagnating, or stabilizing.

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Decomposition of transaction volume, sell-through rates, and pricing premiums or discounts

  The analysis of Hong Kong new projects compares selling-price discounts or premiums relative to the secondary market alongside actual sell-through rates, demonstrating that the difference between 100% and 2% sell-through rates primarily stems from pricing strategies.

• Event Games and Behavioral FinanceEvent-driven analysis

  Tracking new-project launches, land awards, and earnings events

  The report tracks the immediate impact of events such as specific launch dates, the award of the Hung Shui Kiu project, and Henderson Land's better-than-expected results on sales performance, project economics, and share prices.

• Fixed Income and Credit AnalysisSpread analysis

  Comparison of relative index performance, bond quotations, and yields

  The credit section compares the performance of the China High Yield Property Index with the broader High Yield Bond Index and combines offer prices, yields to maturity or call, and issuers' credit trends to identify relative value.

Asset mapping & comparison

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

• China Overseas Land & Investment (00688.HK), China Resources Land (01109.HK), China Jinmao (00817.HK), China Resources Mixc Lifestyle (01209.HK)

  JPMorgan's top Mainland real estate and property management stock picks.

  Strengths

  The report includes them in its top-pick portfolio.

  Comparison

  Mainland property stocks rose 1% last week, compared with a 0.2% gain in the Hang Seng Index.

• Swire Properties (01972.HK), Wharf Real Estate Investment Company (01997.HK), Link REIT (00823.HK), Hongkong Land

  JPMorgan's top Hong Kong developer and landlord stock picks.

  Strengths

  The report includes them in its top Hong Kong real estate stock portfolio.

  Comparison

  Hong Kong property and conglomerate stocks rose 3% last week, compared with a 0.2% gain in the Hang Seng Index.

• CK Hutchison (00001.HK), Jardine Matheson

  JPMorgan's top Hong Kong conglomerate picks.

  Strengths

  The report includes them in its top conglomerate portfolio.

• Hysan Development 7.2% perpetual bond

  JPMorgan maintains an overweight view and considers it a carry strategy.

  Strengths

  Fitch affirmed its BBB rating and stable outlook; retail rental income is expected to remain resilient, office income is expected to stabilize, and asset recycling and contributions from Lee Garden Eight are expected to support deleveraging.

  Comparison

  Offer price 105.4, yield to call 5.7%.

• New World Development 10.131% perpetual bond

  JPMorgan's top credit bond pick.

  Comparison

  Offer price 101.4, yield to maturity 10.7%.

• New World Development 12.179% perpetual bond

  JPMorgan's top credit bond pick.

  Comparison

  Offer price 98.4, yield to maturity 13.8%.

• Longfor 2029 bond

  JPMorgan's top credit bond pick.

  Comparison

  Offer price 86.3, yield to maturity 9.2%.

Key data

• Real-time secondary transactions across nine Mainland cities+7% YoYPrevious: +1% YoY
• Real-time secondary transactions in Mainland tier-one cities+8% YoYPrevious: -3% YoY; Beijing +12% YoY
• Primary-market registrations across nineteen Mainland cities-8% YoYPrevious: +2%; tier-one cities +13% YoY
• Secondary-market registrations across twelve Mainland cities-1% YoYPrevious: +10%
• Tier-one-city property-viewing index22Previous: 21; 20 to 40 indicates recovery
• Broker manager confidence index50Previous: 51; Shanghai 46→51, Guangzhou 48→43
• Secondary listings in tier-one cities-1.2% MoMBeijing -3.2%, Shanghai -0.8%; down approximately 6% from the March peak
• Sell-through rate for the first batch of The Sterling100%180 units, HK$18.4K/sq. ft., 47,000 subscriptions and 254 times oversubscription
• Sell-through rate for the second batch of Phase 2 of Park Silicon2%Only 1 of 58 units sold; HK$18.0K/sq. ft., 18% above the secondary market
• Transactions across 35 major Hong Kong housing estates53 units+33% WoW, -35% YoY
• Hong Kong secondary home prices+0.6% WoW, +13% YTDReached the highest level since the fourth quarter of 2023 and entered the full-year target range of 10% to 15%
• Hung Shui Kiu pilot winning bid and total investmentHK$1.03 billion; HK$16.8 billionIncludes 3,120 residential units and 1.82 million square feet of total residential gross floor area
• Hung Shui Kiu pilot unit costsLand HK$435/sq. ft.; total development cost HK$7.1K/sq. ft.The latest local average secondary-market price is HK$10K to HK$11K/sq. ft.
• Estimated Hung Shui Kiu project margin>30%Based on the assumption that costs are allocated proportionally between development and non-development projects
• Visitor arrivals to Hong Kong+6% YoY+3% MoM
• Mainland property stock sector performance+1% last weekHang Seng Index +0.2% over the same period
• Hong Kong property and conglomerate sector performance+3% last weekHang Seng Index +0.2% over the same period
• JACI China High Yield Property Index-0.62% last week; +10.9% YTDThe China High Yield Bond Index fell 0.17% over the same period
• Hysan credit ratingBBB, stable outlookFitch affirmed the rating; the report maintains an overweight view on Hysan's 7.2% perpetual bond
• Hysan 7.2% perpetual bondOffer price 105.4; yield to call 5.7%JPMorgan lists it as a carry strategy and a top credit bond pick

Impact & implications

The report believes that the improvement in real-time Mainland secondary transactions may lead official data by several weeks, but registrations, confidence, and asking prices have not yet formed a uniformly strong signal. The divergence between 100% and 2% sell-through rates for Hong Kong new projects indicates that homebuying demand has not broadly disappeared but is highly dependent on relative pricing; meanwhile, the year-to-date increase in home prices has reached the full-year target range, suggesting that subsequent momentum may weaken. The Hung Shui Kiu pilot scheme offers high potential profitability under the report's assumptions, but project returns depend on cost allocation. At the asset level, the report separately lists its top Mainland and Hong Kong stock picks and continues to highlight the relative value of several bonds following a short-term decline in the high-yield property credit index.

Risks

• The second batch of Phase 2 of Park Silicon was launched at a price 18% above the local secondary market and achieved only a 2% sell-through rate; the report expects aggressive pricing to result in very weak sales momentum.
• Hong Kong home prices have risen 13% year to date and reached the report's full-year target range; the report expects upward momentum to slow during the remainder of the year.
• The estimated profit margin of more than 30% for the Hung Shui Kiu pilot scheme depends on the assumption that costs are allocated proportionally between development and non-development projects.

What to watch

• Monitor whether the improvement in real-time Mainland secondary transactions, which leads by several weeks, flows through to official primary and secondary-market registrations.
• Monitor the sell-through of subsequent batches of The Sterling following their launch on August 29 and whether selling prices can gradually rise to HK$21K to HK$22K per square foot.
• Monitor the sales performance of the 148 units of La Mirabelle II scheduled for launch on August 28.
• Monitor whether Hong Kong home-price momentum slows during the remainder of the year as expected by the report after rising 13% year to date.
• Monitor the contribution of Lee Garden Eight to Hysan's incremental earnings and deleveraging beginning in the fourth quarter of 2026.
• Monitor the enterprise technology parks and government-facilities site that the Hung Shui Kiu consortium must complete and return by the end of 2028.