A real estate project under construction along the ancient Huai River in Huai'an City, Jiangsu Province, China on January 29, 2026.BEIJING — S&P Global Ratings has lowered its forecast for China property sales this year, barely two months into 2026.The firm said Sunday that primary real estate sales will likely drop by 10% to 14% this year, worse than the 5% to 8% decline for 2026 sales predicted back in October."This is a downturn so entrenched that only the government has capacity to absorb the excess inv ...

Summary of China Housing Survey Insights Industry Overview - The document discusses the current state of the **Chinese housing market**, based on the **UBS Evidence Lab's China Housing Survey** conducted from **October 28 to November 18, 2025**, with **2,500 respondents** across mainland China [2][8]. Key Insights Housing Market Sentiment - **Housing purchase intention** and overall sentiment have shown a slight improvement but remain subdued compared to historical norms. The percentage of respondents planning to buy properties in the next two years increased to **30%**, up from **27%** in the previous year [8]. - **Selling intention** has also strengthened, with **17%** of homeowners planning to sell in the next 1-2 years, compared to **10%** previously [8]. Price Expectations - Over **50%** of respondents reported a decline in property prices over the past six months, with **tier 1 cities** experiencing the most significant deterioration [3][17]. - **42%** of respondents expect housing prices to decline further in the next 12 months, while only **19%** anticipate an increase [18]. - The average new and secondary residential prices fell by over **12%** and **21%** from peak levels by December 2025, respectively [17]. Divergence Among City Tiers - There is a notable divergence in sentiment among different city tiers. **Tier 1 cities** reported the sharpest price declines and increased paper losses, while **tier 3 cities** saw a slight improvement in sentiment due to previous sharp declines in prices [4][10]. - **11%** of respondents in tier 3 cities reported stronger confidence compared to **0%** in tier 1 cities [10]. Economic Factors Influencing Sentiment - Concerns over stalled projects have eased, but they remain a significant factor depressing sentiment. Respondents indicated that further property policy easing, including mortgage rate cuts and improved salary growth, are crucial for boosting confidence [5][34]. - The **People's Bank of China (PBC)** is expected to cut policy rates by **10-20 basis points** in 2026, potentially leading to **30-40 basis points** in mortgage rate cuts [6][39]. Wealth Effect and Consumption - The negative wealth effect is likely to continue impacting household consumption, with **52%** of homeowners reporting paper losses [22]. The average mortgage servicing burden is **27.1%** of monthly income, slightly higher than previous surveys [22]. - The combination of increased paper losses and a high debt servicing burden suggests ongoing constraints for household consumption, although a recent equity market rally may provide some offset [22]. Future Outlook - The property downturn in China is expected to persist into **2026-2027**, albeit with smaller declines in property sales and investment (projected **5-10%** decline in 2026 compared to **-9%/-17%** in 2025) [6][39]. - The sustainability of the marginal improvements in sentiment, particularly in tier 3 cities, remains questionable given the latest weak market data [10][19]. Additional Considerations - The survey indicates that **government assistance** in cash or coupons is viewed as a significant boost to confidence, with **23%** of respondents citing it as important [9]. - The shift from pre-sale schemes to completed-only projects is expected to continue, which may alleviate concerns over project delivery [29]. This summary encapsulates the key findings and insights from the UBS Evidence Lab's China Housing Survey, highlighting the current challenges and potential future developments in the Chinese housing market.

Summary of China Property Monthly Tracker Industry Overview - The report focuses on the **Chinese property market**, highlighting significant declines in new property starts, sales, and construction activities, indicating a downturn in the sector. Key Points Market Performance - **New starts** in October 2025 fell to the lowest monthly level (excluding January and February) since the current downturn began [2][9] - **Primary sales** volume and value declined by **19%** and **24%** year-over-year (YoY), respectively, while construction activities (completion and new starts) plunged nearly **30%** YoY [2][9] - **Secondary sales volume** also fell short of expectations, contributing to a broader weakening in market sentiment and income expectations [2][9] Price Trends - The **average selling price (ASP)** for properties continued to decline, with primary ASPs down **0.5%** month-over-month (MoM) and secondary ASPs down **0.7%** MoM in October [9][31] - The **ASP** in tier-1 cities showed a **0.3%** decline for primary and **0.9%** for secondary markets, indicating a divergence in pricing trends [9][31] Future Expectations - For November 2025, expectations include: 1. Continued price weakness, especially in secondary ASPs across all cities [3][11] 2. An expansion in the YoY decline for primary transaction volume and value, with new starts remaining weak [3][11] 3. A narrowing trend in secondary transaction volume YoY, but still recording substantial declines [3][11] 4. A further decline in land sales volume and a potential negative YoY change in land sales value [3][11] Developer Insights - Developers' land acquisition profitability improved slightly month-over-month in October, with land acquisition spending averaging **28%** of contract sales, down from **54%** in September [2][10] - The report notes that developers are likely to be less aggressive in land banking for the remainder of the year, having largely met their full-year land replenishment plans [18][10] Government Policies and Market Sentiment - The report highlights ongoing discussions regarding the removal of housing purchase restrictions in core districts of tier-1 cities, which could positively impact home purchases [4][10] - There is a noted deterioration in the demand-side strength score, which dropped to **37 out of 100**, indicating a challenging environment for home purchases and secondary market performance [53][55] Construction and Investment Trends - Construction activities are expected to see a high single-digit percentage decline YoY for completions and a **30-40%** decline for new starts in November [17][11] - Developers are expected to focus on smaller projects with better ASP visibility and easier product positioning, rather than larger land parcels requiring phased development [18][10] Financial Metrics - The report provides a detailed summary of key market indicators, including: - **GFA sold**: **61 million sqm** in October, down **18.8%** YoY - **Property sales**: **Rmb 0.6 trillion**, down **24.3%** YoY - **ASP**: **Rmb 9,723/sqm**, down **6.8%** YoY - **New starts**: **37 million sqm**, down **29.5%** YoY - **Completions**: **37 million sqm**, down **28.2%** YoY [20][29] Conclusion - The Chinese property market is experiencing significant challenges, with declining sales, construction activities, and prices. The outlook for November remains cautious, with expectations of continued weakness in both primary and secondary markets. Developers are adjusting their strategies in response to market conditions, and government policies may play a crucial role in shaping future demand.

Financial Performance - China Vanke reported a deeper third-quarter loss [1] Market Trends - Prolonged property market downturn continues to weigh on Vanke's sales [1]

Investment Rating - The report indicates a negative trend in the primary property market, with a weighted average property price decrease of 1.7% month-over-month annualized in April, and a year-over-year decline of 4.0% [2][6]. Core Insights - The divergence in property prices between top-tier and lower-tier cities continues, with Tier-1 cities experiencing a sequential increase in primary home prices, while Tier-2 and Tier-3 cities saw declines [6][10]. - Despite ongoing easing policies, the number of cities with sequentially higher property prices has decreased in both primary and secondary markets [6][10]. - The report emphasizes that the 70-city data pertains only to primary market transactions, with secondary market data indicating price declines of 5%-15% over the past year [6][10]. Summary by Sections Price Changes - The weighted average property price in the primary market fell by 1.7% month-over-month annualized in April, compared to a 2.0% decline in March [2][6]. - Year-on-year, the weighted average new home prices decreased by 4.0% in April, an improvement from the 4.5% decline in March [2][6]. City Tier Analysis - Tier-1 cities saw a sequential increase in property prices of 1.7% month-over-month annualized in April, up from 0.8% in March [6][10]. - Conversely, Tier-2 and Tier-3 cities experienced declines of 1.4% and 3.5% month-over-month annualized, respectively [6][10]. Market Dynamics - The report notes a 10% year-over-year decrease in new home transaction volume in major cities as of May [10]. - Policymakers have intensified housing easing efforts, including a recent 25 basis point cut on the housing provident fund mortgage rate, to counteract the property downturn [10].