China Property Names’ Rally Lacks Firm Ground, but Key State-Owned Developers’ Shares Attractive

We think the recent buying frenzy in China real estate names was induced by incremental policy easing and investors’ reignited sentiment, rather than a rebound in durable home demand. While policy relief has lifted home sales in select key cities, this may be short-lived as home price weakness will likely persist amid oversupply. We also believe that new directives will pose a limited impact on less wealthy cities, given their already loosened homebuying curbs. As such, we reiterate our view that nationwide new home sales value and prices should stabilize in mid-2025 as excess inventory is absorbed, and maintain our fair value estimates for our China property sector coverage.