Morgan Stanley sees weaker China home prices amid sluggish sales

Investing.com -- Morgan Stanley reported that China's home sales remained weak in July as property prices continued to decline across the country.

Primary home sales in 65 cities tracked by CREIS fell 1% year-over-year in July, an improvement from the 10% decline recorded in June. Secondary home sales in 33 cities rose 6% year-over-year, slightly below June's 7% increase. Year-to-date figures showed primary sales down 13% and secondary sales up 3%.

Home prices from the National Bureau of Statistics showed new home prices in 70 cities fell 3.4% year-over-year and 0.2% month-over-month in July. Secondary home prices declined 5.4% year-over-year and 0.3% month-over-month. Tier 1 cities saw smaller price movements, with primary prices flat and secondary prices up 0.2%.

Secondary market listing prices tracked by Bingshan across 85 cities dropped 9.6% year-over-year and 0.5% month-over-month. Transaction prices in 42 cities fell 10% year-over-year and 0.3% month-over-month.

Secondary property listings increased 0.5% month-over-month on average across approximately 50 sample cities. More than 70% of cities recorded monthly increases in total listings, up from 63% in June. Compared to end-2025 levels, over 50% of cities had higher total listings, with 35% reaching record highs.

Primary inventory levels showed mixed results. CRIC data indicated inventory in 70 sample cities edged down to 31.7 months in June from 31.8 months. Tier 1 cities saw inventory decline to 21.4 months, Tier 2 cities remained flat at 30.4 months, and Tier 3 cities increased to 42.9 months.

Land sales tracked by CREIS across 300 cities fell 15% year-over-year in gross floor area and 5% in value during July. The average land auction premium stood at 10%. Top-100 developers added 3% more saleable resources year-over-year in July, though year-to-date additions remained down 32% as of July.

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