JPMorgan released a research report stating that preliminary sales data from Mainland China's residential property market during the National Day Golden Week were encouraging, with real-time second-hand transactions across 26 cities rising 59% year-on-year, viewing volume across 44 cities up 16% year-on-year, and new home subscriptions up 15% year-on-year. The bank believes the real question lies in sustainability one to two months later, and its top picks remain China Resources Land Ltd (ASX: 01109), China Overseas Land & Investment Ltd (ASX: 00688), and KE Holdings-W (ASX: 02423).
The bank noted that the performance was not surprising, as the first week after the mortgage subsidy policy took effect on October 1 represents an immediate reaction following the nationwide policy implementation. The bank generally does not get overly excited about policy-driven sales improvements, which have historically tended to be short-lived, and would prefer to see organic improvement similar to the second quarter of 2026. After preliminary communication with leading state-owned enterprise developers, conditions were mixed, with some describing "decent growth" while others indicated the market remains "weak."
On October 8, Chinese developer stocks rose 1% (while the Hang Seng Index fell 1.4%), mainly driven by state-owned enterprises, with China Overseas Land & Investment Ltd (ASX: 00688) up 4% and China Resources Land Ltd (ASX: 01109) up 3%; however, most distressed developers declined. The bank believes this divergence shows the market is rewarding short-term data improvement (with state-owned enterprises outperforming), rather than betting on policy (which has already landed, hence the profit-taking).
On the Mainland retail side, tenant same-store sales for major landlords grew 5% to 10% year-on-year, better than market concerns, and the bank maintains a positive view on China Resources Mixc Lifestyle Services Ltd (ASX: 01209). On the Hong Kong retail side, Mainland visitor arrivals to Hong Kong rose 9% year-on-year (overall up 6%), with multiple retail tenants recording double-digit year-on-year sales growth, possibly benefiting from the weaker Hong Kong dollar, which is a positive read for Wharf Real Estate Investment Company Ltd (ASX: 01997).