JPMorgan: China Property — Lowering Down Payment Ratio for Commercial Properties Is Marginally Positive
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On January 15, 2026, the People's Bank of China reduced the minimum down payment ratio for commercial properties from 50% to 30%. However, JPMorgan views this policy change as only marginally positive for developers, noting that residential down payments were already lowered to 15% in September 2024. The limited impact stems from the fact that commercial properties account for merely 5–10% of developers' contracted sales. Furthermore, commercial property sales values have plummeted 63% from their 2017 peak, representing around 9% of total national property sales. JPMorgan suggests that policymakers will likely continue rolling out piecemeal support measures, but these remain insufficient to meaningfully revive homebuyer confidence. Historical trading patterns indicate the sector typically experiences short-term rebounds ahead of major government meetings. The next key windows are the March Two Sessions and the April Politburo meeting. JPMorgan's top picks include China Resources Land (1109.HK, OW), China Resources Mixc Lifestyle (1209.HK, OW), and China Jinmao (0817.HK, OW). In policy-driven rallies, Longfor Group (0960.HK, OW) offers the best risk-reward profile. Potential future support measures could include mortgage rate subsidies, easing purchase restrictions in Shanghai and Shenzhen, transaction tax reductions, and local government inventory acquisition subsidies.