JPMorgan: Mainland China/Hong Kong Property: Mainland Existing-Home Sales Up 18% Y/Y; Hong Kong Valuation Index Hits New High
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JPMorgan's latest property tracker highlights diverging trends across mainland China and Hong Kong. On the mainland, new-home registrations across 60 cities rose 9% year-on-year, while existing-home registrations across 12 cities jumped 18%, reversing the prior week's declines. However, year-to-date new-home sales across 20 cities remain down 12%. The Centaline listing price index for tier-one existing homes edged down to 19.0, and the manager confidence index held steady at 55. The mainland property sector gained 6% last week, outperforming the Hang Seng Index, driven by robust existing-home data. JPMorgan maintains its top mainland picks—China Overseas Land & Investment, CR MixC Lifestyle, and Jinmao—while noting improved risk-reward for China Overseas Land & Investment.
In Hong Kong, the price index slipped 0.01% week-over-week but remains up 6.6% year-to-date, sitting just 3.4 percentage points shy of JPMorgan's full-year forecast of 10–15% growth. The Centaline Valuation Index surged to 92.1, a new high since February 2023, suggesting banks are raising property valuations and signaling further price upside. Weekend new-launch sales remained robust, with New World Development's The Pavilia Farm III fully sold out. JPMorgan's Hong Kong top picks include Sun Hung Kai Properties, Sino Land, Swire Properties, Hang Lung Group, Jardine Matheson, and CK Hutchison Holdings.
On credit, Moody's downgraded Longfor Group to B1/Stable, but JPMorgan maintains its overweight stance, citing approximately RMB 17 billion in available cash and sufficient liquidity to cover maturities over the next two years.