China Property Weekly: Transactions Ease Slightly as Urban Renewal Policies Expand

How much have transactions weakened?

In week 43, the floor area of new homes sold across approximately 75 cities fell 4% week on week and 12% year on year, while new-home search activity fell 3.3% week on week. Year to date, new-home sales area has fallen an average of 12% year on year, and is down 18% and 35% from the corresponding periods of 2024 and 2023, respectively.
The floor area of existing homes sold in approximately 20 cities fell 5% week on week but rose 9% year on year. Year to date, it has risen an average of 2% year on year and is 11% and 13% above the corresponding periods of 2024 and 2023, respectively, outperforming new homes.
Existing-home subscription sales were broadly stable, but viewing volumes fell 4% week on week, and both agents’ and sellers’ expectations of home price increases eased. Subscriptions typically lead registered transactions by 1 to 2 weeks and can provide clues about near-term transactions.

Goldman Sachs observed that several recent Shanghai developments had high subscription rates and sold through quickly, driving up prices at some projects. This performance also echoes Shanghai’s relatively strong home price trend in National Bureau of Statistics data.
On this basis, Goldman Sachs maintained its optimistic view of average selling prices in Shanghai and Shenzhen. However, agents’ and sellers’ expectations of price increases across the monitored cities continued to weaken, and the performance of selected new developments diverged from the national transaction trend.
Supply contracted: new listings in the monitored cities fell 8% week on week; inventory in approximately 20 cities fell 0.3% week on week, and the inventory absorption period was 26.5 months, below the September average of 27.2 months.

The Ministry of Housing and Urban-Rural Development and five other departments issued a document calling for the orderly implementation of approximately 1500 major renovation projects in old neighborhoods and industrial areas, a 5-year transition period for land use, and expanded channels for infrastructure REITs. Heating networks that have operated for 20 years were also included in the scope of renovation.
The Ministry of Finance allocated the remaining local government debt quota of 550 billion yuan, including 250 billion yuan in remaining special-purpose bond quota, with priority given to projects already under construction. New projects will focus on the “six networks,” including urban underground pipelines.
Shanghai’s 2026–2028 action plan calls for renovating approximately 24 million square meters of old residential compounds and comprehensively upgrading 700 thousand square meters of old housing over three years, as well as carrying out energy-efficiency upgrades on 12 million square meters of existing housing and accelerating the renewal of urban villages and commercial and office buildings.

Based on sales data from approximately 75 cities, Goldman Sachs expects contracted sales by the top one hundred developers to fall 12% year on year in October, a narrower decline than the 14% recorded in September.
Based on float glass supply and demand and a demand model, Goldman Sachs’ completion tracker indicates that completed floor area fell in the high twenties in percentage terms year on year in October. By comparison, the National Bureau of Statistics reported a 36% year-on-year decline in completed floor area in September.
Combining land sales trends in 300 cities with the national cement shipment rate, Goldman Sachs expects the year-on-year decline in new construction starts by floor area in October to also be in the high twenties in percentage terms. The National Bureau of Statistics reported a year-on-year decline of 26% in September.