J.P. Morgan: New-home sales remain weak after mortgage subsidies take effect, while existing-home sales grow rapidly

What happened to new-home sales after mortgage subsidies took effect?

According to China Index Academy, combined sales by the top one hundred developers fell 13% year on year in October 2026, a wider decline than the 11% recorded in September and weaker than JPMorgan’s previous forecast of a single-digit decline. The bank had expected mortgage subsidies, effective 1 October, to provide at least a modest short-term boost to sales in lower-tier cities.
The top one hundred developers recorded approximately 181 billion yuan in sales in October, up 10% month on month. JPMorgan saw this as related to seasonality: from 2016 to 2025, sales in October accounted for an average of 9.1% of annual sales, above the 8.5% recorded in September.
Sales in October were 76% below the average for the same period in 2018–2021, a narrower gap than the 80% shortfall in September, but still within the usual range of 70%–80% below that average.

The Iceberg Index shows that existing-home sales in key cities grew more than 20% year on year in October, accelerating slightly from 19% in September. JPMorgan expects existing-home sales to maintain year-on-year growth of more than 10% in the fourth quarter of 2026.
JPMorgan estimates that about 22% of new-home listings nationwide may qualify for mortgage subsidies, compared with approximately 40% of existing-home listings. The difference in coverage underpins the bank’s view that existing homes will benefit more on a relative basis.

The year-on-year decline in sales by key state-owned developers narrowed from 16% in September to 3% in October; JPMorgan believes this was mainly related to the timing of property launches.
Among the key listed developers, China Merchants Shekou, C&D and China Resources Land were the only three state-owned developers to achieve year-on-year sales growth in October, with increases of 23%, 10% and 3%, respectively. In the first 10 months of the year, cumulative sales at China Resources Land, China Overseas Land & Investment, China Jinmao and China Merchants Shekou remained up 2%–6% year on year.

Sales by the top one hundred developers fell 13% year on year in the first 10 months of 2026. JPMorgan maintains its forecast of a 12% decline for the full year.
The bank expects sales by key developers to fall 20%–30% year on year in 2027: under the influence of the “828 policy,” developers need to retain cash to accommodate changes in cash-flow planning, and land acquisitions may slow in the fourth quarter of 2026.
For stock selection, JPMorgan remains selective and prefers China Resources Land, China Resources Mixc Lifestyle Services and KE Holdings.