Chinese property stocks climb on October 8 and 9 after holiday home sales data
In short
Chinese property stocks rose on October 8 and 9, the trading days after the National Day holiday, with Lujiazui (陆家嘴) and Shenwuye A (深物业A) hitting the daily limit on October 8 and Shilianhang (世联行) on October 9. Outlets linked the move to holiday sales data: Zhongzhi Research Institute (中指研究院) said new-home sales in 25 key cities over October 1 to 7 were up 33.8% in daily average terms from last year's holiday, and second-hand home activity in Shenzhen rose.
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Chinese property stocks rose on October 8, after the National Day holiday. CLS reported that Shenwuye A (深物业A) and Lujiazui (陆家嘴) hit the daily trading limit, with Shilianhang (世联行), Damingcheng (大名城), Yangguang Gufen (阳光股份) and Woaiwojia (我爱我家) also rising. Jiemian said Lujiazui's limit-up was its second in a row and that Zhaoshang Shekou (招商蛇口) rose more than 3%, while the CSI 800 Real Estate Index (中证800地产指数) rose more than 2% intraday before closing higher. [ 2 , 3 ]
The rise continued on October 9. CLS and Jiemian reported that Shilianhang hit the daily limit, with Shenwuye A and Damingcheng also rising; Jiemian also listed Lujiazui, Zhongtian Fuwu (中天服务) and Zhongjiao Fazhan (中交发展). [ 4 , 5 ]
Outlets linked the moves to holiday sales. CLS cited Zhongzhi Research Institute (中指研究院) data published on October 8 showing 551,000 square metres of new homes sold in 25 key cities from October 1 to 7, up 33.8% in daily average terms from last year's holiday. Both CLS and Jiemian reported a marked rise in second-hand housing activity in Shenzhen; Jiemian cited Shenzhen Beike Research Institute (深圳贝壳研究院) data showing contracts at Beike partner stores up 49% year on year from October 1 to 6. CLS pointed to Shenzhen lifting purchase limits in non-core areas, while Jiemian cited a new policy on sales of completed homes and mortgage interest subsidies. [ 2 , 3 , 4 ]
Jiemian's report, which promoted the Huabao property ETF (地产ETF华宝, 159707), quoted CITIC Securities as saying conditions in first-tier cities may be a strong signal that home prices have bottomed, and Xibu Zhengquan (西部证券) as saying many property stocks trade below book value. It said the CSI 800 Real Estate Index had a price-to-book ratio of 0.61 as of September 30. [ 3 ]
Why it matters
Business outlets presented the holiday sales figures and new housing measures as the reason for the rise in property shares. Brokerages quoted by Jiemian said low valuations of property stocks could leave room for gains if home prices stabilise, though those views appeared in a piece promoting a property ETF.
Key facts
- On October 8 the property sector rose, with Shenwuye A (深物业A) and Lujiazui (陆家嘴) hitting the daily trading limit. [ 2 , 3 ]
- Jiemian reported Lujiazui's limit-up on October 8 was its second in a row, and that Zhaoshang Shekou (招商蛇口) rose more than 3%. [ 3 ]
- On October 9 Shilianhang (世联行) hit the daily limit, with Shenwuye A and Damingcheng (大名城) among stocks that followed it up. [ 4 , 5 ]
- Zhongzhi Research Institute (中指研究院) data published on October 8 showed 551,000 square metres of new homes sold in 25 key cities from October 1 to 7, up 33.8% in daily average terms from last year's National Day holiday. [ 4 ]
- Shenzhen Beike Research Institute (深圳贝壳研究院) said second-hand home contracts signed at Beike partner stores in Shenzhen from October 1 to 6 rose 49% year on year. [ 3 ]
- Several housing projects in Shenzhen's Guangming and Bao'an districts saw holiday visits about 30% above normal days, close to 140 groups a day, according to reports cited by Jiemian. [ 3 ]
- As of September 30, the CSI 800 Real Estate Index (中证800地产指数) had a price-to-book ratio of 0.61, lower than in more than 94% of the past 10 years, Jiemian reported. [ 3 ]
Confirmed by several sources
- The property sector was active in early trading on October 8. [ 1 , 2 , 3 ]
- Lujiazui hit the daily trading limit on October 8. [ 2 , 3 ]
- Shilianhang hit the daily trading limit on October 9, with Shenwuye A, Damingcheng and others also rising. [ 4 , 5 ]
- Activity in Shenzhen's second-hand housing market rose markedly during the National Day holiday. [ 2 , 3 ]
Still unclear
- Whether rising rents and a growing number of second-hand homes where purchase costs are matched by rents signal that home prices have bottomed. This is CITIC Securities' view, reported only by Jiemian in a piece promoting an ETF.
- Whether property stocks have about twice their current price as room for recovery if home prices rise 10%. This is an estimate by Xibu Zhengquan (西部证券) reported by one outlet in promotional copy.
- Which policies drove the holiday sales. CLS pointed to the lifting of purchase limits in non-core areas of Shenzhen, while Jiemian cited a new policy on sales of completed homes and mortgage interest subsidies.
What local media are saying
Timeline, local time
- October 8: Yicai reports the property sector is active in early trading. [ 1 ]
- October 8: CLS reports Shenwuye A and Lujiazui have hit the daily limit. [ 2 ]
- October 8: Jiemian reports the CSI 800 Real Estate Index rose more than 2% intraday and closed higher. [ 3 ]
- October 9: CLS reports Shilianhang has hit the daily limit as the sector stays active. [ 4 ]
- October 9: Jiemian reports the sector rising in early trading, with Lujiazui, Zhongtian Fuwu (中天服务) and Zhongjiao Fazhan (中交发展) among gainers. [ 5 ]