In October 2026, the year-on-year decline in sales by the top one hundred developers widened to 13%, weaker than JPMorgan expected. Existing-home transactions in key cities rose more than 20% year on year; differences in subsidy coverage could mean existing homes benefit more on a relative basis.
The month-on-month decline in existing-home prices across one hundred cities widened for a sixth consecutive month, even as new listings edged down and viewing activity increased. Morgan Stanley expects a weak macroeconomic environment and continued cuts to asking prices to keep weighing on home prices.
New-home transactions rebounded week on week in week 44 but remained down year on year; cumulative existing-home transactions for the year outperformed new homes. Land transactions rose in October as supply and premium rates weakened.
Of the 45 state-owned developers screened by JPMorgan, 22 breached two or three financing red lines. The bank expects the government to strive to prevent defaults on publicly offered bonds issued by state-owned developers, but some local state-owned enterprises may still face extensions of loans or non-standard debt.
The residential markets in Shanghai and Hangzhou have improved since HSBC’s first-quarter visit, but new-home sales have slowed from their spring peak. High-quality, differentiated projects continue to sell relatively quickly, while concentrated supply has slowed sales of luxury homes; Greentown says the reform had a smaller-than-expected impact on sales from September to October.
Citi expects existing-home transactions to support total residential transaction area, with cities such as Shanghai, Beijing and Shenzhen likely to stabilize first. Meanwhile, new-home sales, development investment and inventory reduction in lower-tier cities remain under pressure.
In week 43, new and existing home transactions fell 4% and 5% week on week, respectively, although some new developments in Shanghai performed strongly. Goldman Sachs is optimistic about home prices in Shanghai and Shenzhen, while expecting sales by the top one hundred developers to still fall 12% year on year in October.
Hong Kong conglomerates have generally held up better during major Hang Seng Index declines; the recent relative strength of large mainland Chinese property companies owned by the central government may reflect a rotation of capital. Hongkong Land’s LANDMARK renovation is also progressing, with tenant sales so far unaffected by construction.
Goldman Sachs has cut its forecast for structural housing demand in 2027–2035 by 16%, while raising its forecast for two-year home price gains in Shanghai and Shenzhen. The link between the two is a sharp contraction in new-home supply; prices, construction investment and the composition of transactions will adjust on different timelines.
