China Property: More Signs of Secondary Home Sales Weakening

Research evidence excerpt

China Property: More Signs of Secondary Home Sales Weakening

Update

June 11, 2026 04:16 PM GMT

Morgan Stanley Asia Limited+MChina Property | Asia Pacific Stephen Cheung, CFA

Equity Analyst

More Signs of Secondary Home Stephen.Cheung@morganstanley.comCara Zhu +852 3963-0385

Cara.Zhu@morganstanley.com +852 2848-7117

Sales Weakening

Key Takeaways

25-city secondary real-time home sales softened to 9.2% y-y MTD as of June 10

(vs. 30% in April, 26% in May) despite a lower base from Dragon Boat holiday. China Property

Asia Pacific

Low-tier 2 cities (Nanchang, Foshan, Nantong, Dongguan, Ningbo, Xi'an) saw fast Industry View In-Line

deceleration and select cities (Tianjin, Changsha, Chengdu) turned negative y-y.

Related reports:

Cities with policy easing in late April saw divergence - Suzhou/Wuhan remained 1. An Inflection or Another False Start? (18 May

robust, while Guangzhou/Shenzhen/Foshan decelerated by double-digit ppts. 2026)

This is consistent with our call for milder y-y in June, with potential to turn 2. Diverging Home Price Trends Continued in

negative y-y in 3Q amid diminishing policy effects and pent-up demand... May (2 June 2026)

3. Managed Housing Downcycle to Last Another

… leading to a broadly soft m-m home price downtrend in 2026–27, though

Two Years (25 January 2026)

select Tier 1 cities may see a mild uptrend due to better destocking progress.

4. 2026 Outlook: Physical Market Stays

Challenging; Diverging Outperformance ofStay selective: In our recent insight report - An Inflection or Another False Start? -

Alpha Plays (10 December 2025)we emphasized that the unexpected rebound in secondary home sales in March-

April may have been due to the release of pent-up demand from 4Q25 on the back

of HPR/HPF mortgage easing and less-panicky resident sentiment.