摩根大通-中国房价跟踪0719

AsiaPacificEconomicResearch

15July2024

Chinahousing:Continuouspricecorrection

Explicithousingpolicyshiftlesslikelyfrom3rdPlenum

ThedeclineintheNBS70-cityhomepricesremainselevated,thoughmarginallylessonthemonthforsecondaryhousingwiththisyear’sfirstsequentialgainforBeijingandShanghai.Newhomepricesweredown4.9%oyaor0.7%m/mnsa,andsecondaryhomepricesweredown7.9%oyaor0.9%m/mnsa.Itfollowsthe4.3%oyaor0.7%m/mfallfornewhomeprices,and7.5%oyaor1.0%m/mfallforsecondaryhomepricesinMay.Comparedtothepreviousmonth,newhomepricesdeclinedin64citiesinJune(vs68citiesinMay),increasedin4cities(vs2citiesinMay),andstayedunchangedintheremainingtwocities.Acrosscitytiers,newhomepricesfell0.5%m/minTier-1cities(vs-0.7%May),withcontinuedoutperformanceofShanghai(+0.4%),anda0.6%,1.2%and0.7%fallinBeijing,GuangzhouandShenzhen.Newhomepricesalsodropped0.7%m/minTier-2cities(unchangedfromMay)and0.6%inTier-3cities(vs.-0.8%May).Asforthe70-citysecondaryhomeprice,itdropped0.4%m/mnsainTier-1cities,narrowingfrom-1.2%inMay,withthefirstsequentialgainat0.2%and0.5%forBeijingandShanghaithisyear.Meanwhile,secondaryhomepricesdeclined0.9%m/minbothTier-2andTier-3cities.AsofJune,the70majorcities’newhomepricesdeclined7.1%comparedtothepeakinAugust2021,alongwitha13.2%dropforsecondaryhomeprices.

ImpulsefromtheMay17demand-sidepolicyeasingseemstohavefadedaftertheseasonalpick-upinJune,utilizationofPBOC’srelendingtofacilitatedestockingislargelyunknown.Thereareongoingdifferentiatedperformancebetweennewhomeandsecondaryhomesales,andbetweenpresaleandsalesoffinishednewhomes,withlingeringconcernsabouthomedeliveryespeciallybyprivatedevelopers.Majorcities’newhomesalessurgedintotheendof1H,partlyonquarter-endormid-yearseasonalitybutthemomentumseemstohavelargelyfadedenteringJuly.Thetop100developers’aggregatesalesdeclinenarrowedto14%fromMay’s32%oya,witha4%riseforSOEdevelopers,and41%and57%declinesfornon-distressedPOEsanddistresseddevelopers.Thisindicatestheliquiditystressforprivatedevelopersremainsanissuedespiteexistingpolicyefforts(e.g.white-listdevelopersandbanksupportfornormalworkingcapitalloanstodevelopersetc).AnothermoverecentlyfromShenzhenmayfurthertightendevelopers’near-termcashflowconstraintthougheasehomebuyers’worryofhomedelivery.ItwasreportedthatbanksinShenzhenwillonlydisbursemortgageaftertopping-outofthebuildingstructure.Secondaryhomesalescontinuedtooutperform,butitspricepressuremaylingerwithrisingsecondarylistings.Centaline’ssecondaryhomeaskingpriceindexfortier-1citiesinchedupwhilesalesmangerconfidenceindextickedlowerrecently.Butintheabsenceofaforcefulpick-uptoabove30,historicalexperiencepointstocontinuingsecondaryhomepricedeclinesthoughlikelyataslowermonthlyrun-rate.TherehasbeenalotofattentionontheprogressregardingthePBOC’s300bnyuanre-

Seepage4foranalystcertificationandimportantdisclosures.

EmergingMarketsAsia,EconomicandPolicyResearch

TingtingGe

(852)2800-0143

tingting.ge@

HaibinZhu

(852)2800-7039

haibin.zhu@

GraceNg

(852)2800-7002

grace.h.ng@

JiYan

(852)2800-7673

ji.yan@

JPMorganChaseBank,N.A.,HongKongBranch

2

TingtingGe(852)2800-0143tingting.ge@

JPMorganChaseBank,N.A.,HongKongBranchHaibinZhu(852)2800-7039

haibin.zhu@

GraceNg(852)2800-7002grace.h.ng@

JiYan(852)2800-7673ji.yan@

AsiaPacificEconomicResearch

Chinahousing:Continuouspricecorrection

15July2024

lendingfacility,butthereisnoofficialinformationdisclosureyet.OurchannelcheckssuggestlimitedutilizationandsomeofthefundingmaygotothepurchaseoffinishedbutunsoldprojectsheldbyLGFVs.Ifitisthecase,thebeneficiaryprivatedeveloperswillbelimited.

Explicithousingpolicyshiftinthe3rdPlenumislesslikely,butifHukouorrurallandreformismentioned,weseeitaspositive.Themuch-anticipated3rdPlenumofthe20thPartyCongresshascommencedtoday,andwillbehelduntilthisThursday(July15-18).Wearesupposedtohaveacommuniquewhenthemeetingisconcludedonthelastday.Therehavebeenmarketexpectationsofmorepolicyeasingfromthemeetingsothatthehousingmarketcorrectioncouldhitabrakesoon.Wethinkthelikelihoodofexplicithousingpolicyshiftfromthemeetingislow.Onereasonisthatthe3rdPlenumfocusesmoreonmid-to-longtermreformissues,insteadofnear-termgrowthheadwinds.However,ifHukoureformorrurallandreformismentioned,wethinkitwillbehelpfulforthemedium-termrebalancingofthehousingmarket.WehavebeenarguingthatthegapbetweenthetwomeasuresofChina’surbanizationratio(urban-areausualresidencebasedat66%vs.Hukousystembasedat48%),18%oftotalpopulation(or250millionpeople),representsthepotentialdemandforpublicandrentalhousing.Ononehand,weneedtheHukoureformtofreeupthereplacementhomedemandfrombeneficiaryhouseholds.Ontheotherhand,weneedtherurallandreform,allowingrurallandstobetradable,tofinancecommodityhousingdestockingandtransformationtopublichousing,andsocialsafetynetworkinthenewurbanizationprocess.

China70-cityhousingprices

70- 60- 50- 40-

2010Dec=100,bothscales157

160

150

140

Newhome

146.5

133

Secondaryhome

300.0

20-0.5

10-1.0

0-1.5

130

120

115.4

110

100

90

1112131415161718192021222324

Source:NBS,J.P.Morgan

Chinasecondaryhomeprice

askingpriceindex

-2.0-1.5-1.0-0.5

IndexCentalinetier-1cities’%m/mnsa

NBS70-citysecondary

homeprice

1112131415161718192021222324

Source:Centaline,NBS,J.P.Morgan

China:70-citypropertyprice

UnchangedGrowth(rhs)

Increased

Declined

%m/m

No.ofcities

70

60

50

40

30

20

10

0

1.51.20.90.60.30.0-0.3-0.6-0.9

Jan18Jan19Jan20Jan21Jan22Jan23Jan24

Source:NBS,J.P.Morgan

Housingpolicyandhousingmarketactivity

Index

100

Housingpolicyindex

Index,inreverseorder

-20

Housingmarketactivityindex

-10

80

0

60

40

10

20

30

40

20

50

0

60

0305070911131517192123

Source:NBS;J.P.Morgan;Note:PreliminaryestimatesforJun2024housingmarketactivityindexwithtentativeassumptionsforlandsalesgrowth.

3

TingtingGe(852)2800-0143tingting.ge@

JPMorganChaseBank,N.A.,HongKongBranchHaibinZhu(852)2800-7039

haibin.zhu@

GraceNg(852)2800-7002grace.h.ng@

JiYan(852)2800-7673ji.yan@

AsiaPacificEconomicResearch

15July2024

Housingtransactionsbysqmin30majorcities

sqm,

Thousand7dma

2020-21avg2022

2024

2019

2023

900-750-600-450-300-150-

0-

JanFebMarAprMayJunJulAugSepOctNovDec

Source:Wind,J.P.Morgan

Secondaryhousingtransactionsin8majorcities

Avgunit,7dma201920202021

400202220232024

350

300

250

200

150

100

50

0

JanFebMarAprMayJunJulAugSepOctNovDec

Source:Wind,J.P.Morgan

4

TingtingGe(852)2800-0143tingting.ge@

JPMorganChaseBank,N.A.,HongKongBranchHaibinZhu(852)2800-7039

haibin.zhu@

GraceNg(852)2800-7002grace.h.ng@

JiYan(852)2800-7673ji.yan@

AsiaPacificEconomicResearch

Chinahousing:Continuouspricecorrection

15July2024

Disclosures

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accuratelyreflecttheResearchAnalyst’spersonalviewsaboutanyandallofthesubjectsecuritiesorissuers;and(2)nopartofanyofthe

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requirements,thattheResearchAnalyst’sanalysiswasmadeingoodfaithandthattheviewsreflecttheResearchAnalyst’sownopinion,withoutundueinfluenceorintervention.

AllauthorsnamedwithinthisreportareResearchAnalystswhoproduceindependentresearchunlessotherwisespecified.InEurope,SectorSpecialists(SalesandTrading)maybeshownonthisreportascontactsbutarenotauthorsofthereportorpartoftheResearchDepartment.

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Valuation&Methodology:ForJ.P.Morgan'sEmergingMarketsSovereignResearch,weassignaratingtoeachsovereignissuer(Overweight,MarketweightorUnderweight)basedonourviewofwhetherthecombinationoftheissuer’sfundamentals,markettechnicals,andtherelativevalueofitssecuritieswillcauseittooutperform,performinlinewith,orunderperformthecreditreturnsoftheEMBIGDindexoverthenext

threemonths.Ourviewofanissuer’sfundamentalsincludesouropinionofwhethertheissuerisbecomingmoreorlessabletoserviceitsdebtobligationswhentheybecomedueandpayable,aswellaswhetheritswillingnesstoservicedebtobligationsisincreasingordecreasing.

J.P.MorganEmergingMarketsSovereignResearchRatingsDistribution,asofJuly6,2024

Overweight

(buy)

Marketweight

(hold)

Underweight

(sell)

GlobalSovereignResearchUniverse*

11%

79%

11%

IBclients**

29%

48%

86%

*Pleasenotethatthepercentagesmaynotaddto100%becauseofrounding.

**Percentageofsubjectissuerswithineachofthe"Overweight,"Marketweight"and"Underweight"categoriesforwhichJ.P.Morganhasprovidedinvestmentbankingserviceswithintheprevious12months.

ForpurposesofFINRAratingsdistributionrulesonly,ourOverweightratingfallsintoabuyratingcategory;ourMarketweightrating

fallsintoaholdratingcategory;andourUnderweightratingfallsintoasellratingcategory.TheEmergingMarketsSovereign

ResearchRatingDistributionisattheissuerlevel.IssuerswithanNRoranNCdesignationarenotincludedinthetableabove.Thisinformationiscurrentasoftheendofthemostrecentcalendarquarter.

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JPMorganChaseBank,N.A.,HongKongBranchHaibinZhu(852)2800-7039

haibin.zhu@

GraceNg(852)2800-7002grace.h.ng@

JiYan(852)2800-7673ji.yan@

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