On May 29th, leading real estate companies staged a dramatic counterattack. The CSI 800 Real Estate Index, which represents the performance of leading A-share real estate firms, surged over 4.5%. China Vanke Co.,Ltd. and Greenland Holdings both hit the daily limit-up, while Poly Developments and Holdings, China Merchants Shekou Industrial Zone Holdings, and Seazen Holdings, among others, saw significant gains exceeding 5%.
In terms of popular ETFs, following a recent dip to a historical low, the Huabao Real Estate ETF (159707), the only ETF in the market tracking the CSI 800 Real Estate Index, experienced a sharp intraday surge of nearly 6%.
Huatai Securities stated that China's real estate market has shown signs of structural stabilization this year. The institution believes this recovery is driven by a confluence of factors including lowered entry barriers for genuine demand, a narrowing gap between rental yields and mortgage payments, and support from high-density transaction areas among sellers, representing a spontaneous outcome. This trend is expected to continue. The institution forecasts that national sales volume and real estate investment will still decline in 2026, but the year-on-year decline is expected to narrow in the second half of the year.
The institution further indicated that 2026 marks the beginning of breaking the recent "negative cycle" in the real estate market. It is projected that the "second derivative" of housing prices in key cities will turn positive in 2026, and that first-tier cities, along with some cities benefiting from the development of emerging industries, are expected to see the "first derivative" turn positive in 2027. Core cities, represented by first-tier cities, are likely to be the first to benefit from recovery opportunities, suggesting the real estate sector is entering a strategic investment period.
For exposure to central state-owned enterprises and high-quality real estate developers, focusing on the Real Estate ETF (159707) is recommended. Information shows that the Real Estate ETF (159707) tracks the CSI 800 Real Estate Index, aggregating leading, high-quality real estate developers in the market. It offers a distinct advantage in investment focus with high concentration in top-tier companies, as its top ten constituent holdings account for over 90% of the portfolio weight and feature a high proportion of central state-owned enterprises. Against the backdrop of industry consolidation, leading real estate companies may demonstrate greater resilience.
Data source: Shanghai and Shenzhen Stock Exchanges, etc.
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Risk disclosure: The Real Estate ETF passively tracks the CSI 800 Real Estate Index. The base date for this index is December 31, 2004, and its release date is December 21, 2012. The composition of the index's constituent stocks is adjusted according to its compilation rules, and its back-tested historical performance does not indicate future index performance. The index constituents mentioned are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings information or trading trends of any fund managed by the fund manager. The fund manager assesses this fund's risk level as R3 - Medium Risk, suitable for Balanced (C3) and above investors. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to readers, nor shall they bear any responsibility for direct or indirect losses arising from the use of this content. Fund investment carries risks. A fund's past performance does not indicate its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Caution is advised in fund investment.
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