Goldman Sachs China Real Estate Weekly: Week 35 Review — Diverging Volumes and Sentiment; New Central Government Policies
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Goldman Sachs' China property weekly for week 35 highlights diverging volumes and sentiment alongside new central government policy. Primary home sales area rose 6% week-on-week but fell 5% year-on-year (YTD -11% across ~75 cities, -16%/-38% versus 2024/2023), while secondary transactions slipped 2% WoW (+7% YoY). On August 28, the central government introduced three property policies requiring localities to steadily shift commodity housing sales from pre-sale to completed-sale, backed by credit management and capital-market support; Chengdu cut provident-fund loan down payments by 5pp to 15% on August 25, adding a one-year, 20% interest subsidy capped at RMB25k. Sentiment diverged: Centaline's agent index (CSI) rose 1.8pp WoW while the seller listing index (CAI) fell 0.2pp; Iceberg data show Beijing and Shenzhen second-hand prices down 0.2%/0.1% MoM, Shanghai up 0.1%. GS's float-glass-based completion tracker implies August completions fell by high double digits YoY, with FY26E at -15%. Covered SOE developers fell 11% WoW on average (offshore/onshore coverage -8%/-3% versus MSCI China/CSI 300 +1%), leaving valuations at trough: offshore names trade at a 41% discount to end-2026 NAV and 0.4x 2026E P/B (onshore: 33%, 0.4x). COLI (0688.HK, Buy) fell 9%; Poly (600048.SS, Neutral) fell 2%.