Goldman Sachs released a research report stating that the average selling price decline in Mainland China's September primary market slightly narrowed, with first-tier cities continuing their positive trend; the secondary market also showed structurally positive signals, with the month-on-month average price decline in September similar to August, but first-tier cities seeing expanded gains and lower-tier cities seeing narrowed declines. In September, the number of cities among the 70 cities recording month-on-month increases in average primary and secondary home prices rose to 17 and 9, up from 15 and 3 in August.
Goldman Sachs pointed out that price trends are encouraging, but September national primary home sales volume and sales value still fell 21% and 20% year-on-year respectively, below the bank's expectations.
Meanwhile, construction activity remained weak, especially completion performance, reflecting continued sluggish fixed asset investment and the land market. Goldman Sachs noted that developers' land investment intensity has clearly diverged since the 828 policy. Large state-owned enterprises with relatively sound balance sheets, such as CHINA OVERSEAS (ASX: 00688), CHINA RES LAND (ASX: 01109), and China Merchants Shekou (001979.SZ), maintained active replenishment of land reserves, while CHINA JINMAO (ASX: 00817) and GREENTOWN CHINA (ASX: 03900) turned more cautious.
Looking ahead to October, the bank expects the month-on-month average selling price decline in both primary and secondary markets to be similar to September, with first-tier cities' recovery momentum continuing; new home sales volume and sales value year-on-year declines may remain at high double-digit levels, with attention on whether first-tier cities will show signs of price stabilization or bottoming out in the future.
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