China Real Estate A pause before more catalysts materialise

Research evidence excerpt

China Real Estate A pause before more catalysts materialise

19 May 2026

Equities

REMD China Real Estate

A pause before more catalysts materialise China

◆ We view the sector correction a healthy pull-back; Michelle Kwok*

fundamentals are still improving Head of Asia Real Estate and HK Equity Research

The Hongkong and Shanghai Banking Corporation Limited

michellekwok@hsbc.com.hk

◆ June peak pre-sale season and more signs of home price +852 2996 6918

stabilisation could help support valuation on forward earnings Oliver Yu*

Analyst, Asia Real Estate

◆ Prefer CRL and C&D, both rated Buy oliver.y.o.x.yu@hsbc.com.hk

+852 2288 2050

Rally derailed by macro factors: Our covered developers fell 4.5% on 18 May Stephen Wang*, CFA

(HSI: -1.1%), which we attribute to profit-taking after the recent rally rather than Analyst, Asia Real Estate

renewed fundamental concerns. Lower expectations for US and China rate cuts, stephen.wang@hsbc.com.hk

alongside rising US bond yields, are weighing on sentiment. Fundamentally, NBS +852 2284 1675

data show tier-1 cities continued to post m-o-m growth in both primary and secondary

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

markets, with Shanghai’s growth accelerating. Month-to-date in May, tier-1 new home not registered/ qualified pursuant to FINRA regulations

sales area rose 7% y-o-y, and secondary transactions in 10 cities increased 22%

y-o-y. We remain constructive and believe the market is moving towards a natural

equilibrium without policy stimulus. That said, after the sharp valuation recovery,

further re-rating needs firmer evidence of a sustained recovery. We view this pull-

back as a healthy pause for investors to re-engage with the sector.

Accommodative onshore rates but risks for offshore refinancing. Rising US