China Property: Softer Sales Declines in April; We Stay Prudent on Durability

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China Property: Softer Sales Declines in April; We Stay Prudent on Durability

Idea

May 18, 2026 04:45 AM GMT

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

Equity Analyst

Softer Sales Declines in April; Stephen.Cheung@morganstanley.comCara Zhu +852 3963-0385

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

We Stay Prudent on Durability

China Property

Asia Pacific

Home sales posted a milder y-y drop in April on a low base, but Industry View In-Line

construction activity softened further. We see the recent strong Related reports:

secondary home sales to decelerate in the coming months, given 1. Our Thoughts on Recent Stronger-than-

the still-high inventory, fragile buyer sentiment, and limited Expected Sales (26 April 2026)

2. AlphaWise China Property Survey, Mar-26:

improvement on resident income/leverage.

Worsening Sentiment (10 April 2026)

Softer sales decline in April on a low base, as expected, with rebased national 3. Diverging 2026 Guidance Post Weak 2025

sales fell 7.6% y-y in value and 9.5% y-y in volume (vs. -17% and -10% in 3M26, Results (8 April 2026)

respectively), leading YTD sales to -15% y-y in value and -10% in volume in 4M26. 4. Managed Housing Downcycle to Last Another

The NBS 70-city home price index continued to edge down, at a similar pace, falling Two Years (25 January 2026)

0.2% m-m in both primary and secondary markets in March (vs. -0.2% and -0.2% in 5. 2026 Outlook: Physical Market Stays

March, respectively). In particular, Tier-1 cities witnessed +0.1% in primary and +0.4% Challenging; Diverging Outperformance of

in secondary (vs. +0.2 and +0.4% in March) amid strong secondary sales. Alpha Plays (10 December 2025)

Construction activity stayed sluggish: Completions fell 19% y-y and new starts fell

27% y-y in March (vs.