BOCOM International anticipates a sustained improvement in secondary market demand, which is expected to outperform the primary market this year. The firm projects the new home market will remain broadly stable, with buyers continuing to show a preference for state-owned enterprise projects. As capital market sentiment recovers, some leading private developers may seize the opportunity to accelerate their debt restructuring processes. Over the medium to long term, BOCOM International maintains a positive outlook on CHINA RES LAND (01109/Buy) and YUEXIU PROPERTY (00123/Buy), citing their strong sales performance in recent years and superior execution capabilities in sales.

Key observations from BOCOM International are as follows: Sales data for the top 100 developers declined in February. According to preliminary data from CRIC, February remained a traditionally slow season for the sector, compounded by the Chinese New Year holiday. The total full-scale sales of the top 100 developers fell by 31.3% month-on-month to RMB 125.2 billion from RMB 182.2 billion in January. The 20 major listed developers tracked by the firm saw a smaller decline in sales, down 27.4% month-on-month, primarily due to a decrease in sales area (down 11.1% month-on-month) and a drop in average selling price (down 26.5% month-on-month). Among the top 10 developers by sales in February, nine were state-owned enterprises, with Poly Development ranking first. Within the top 50 developers, the market share of contract sales for state-owned enterprises slightly decreased to 78.6% in February (January 2026: 79.0%).

Year-on-year data from the National Bureau of Statistics for January 2026 showed a decline. According to the commodity residential price index for 70 major cities released by the National Bureau of Statistics, the new home price index fell by 3.3% year-on-year and 0.4% month-on-year in January (December 2025: -3.0%/-0.4%). The second-hand home price index declined by 6.2% year-on-year and 0.5% month-on-year (December 2025: -5.4%/-0.7%). The overall tone of real estate policy in February was accommodative. With the "Two Sessions" in March and intensified policy efforts, the central government focused on financial policies, such as relending for affordable housing and financial support for relocation areas from four ministries. The Central Financial Commission emphasized efforts on both supply and demand sides, creating a suitable liquidity environment for the recovery of the real economy and the stable, healthy development of the property market. The 2026 Government Work Report released on March 5 explicitly called for "efforts to stabilize the real estate market." As migrant workers return to cities and online signing processes normalize after the Spring Festival, the market holds expectations for an improvement in March.