Huatai Securities: Core Cities Show Resilience in H1 2026 Real Estate Sales
Huatai Securities reported that in the first half of 2026, the new home real estate market continued to see year-on-year declines in supply and demand. However, the second-hand housing market maintained high activity, with localized signs of price stabilization emerging. Within this market, first-tier cities experienced a significant narrowing of the year-on-year decline in new home sales. Demand for upgraded housing served as a key support for the new home market, while the second-hand market primarily catered to first-time buyers, with a continuous increase in the proportion of lower-priced properties. Huatai Securities believes that as rental price declines narrow further, improvements in rent-to-price ratios are paving the way for a broader market recovery. The firm is monitoring whether price stabilization signals observed in Shanghai will spread to other core cities. The resilience of first-tier city housing prices, optimization of listing structures, and the structural recovery logic in cities with strong emerging industry capacity remain unchanged. This presents a compelling investment opportunity in the sector, with a recommendation to maintain a focus on cities with concentrated emerging industries.
The report from Huatai Securities indicates a bifurcated real estate market in China's core cities during the first half of 2026. While new home sales face ongoing contraction, the second-hand market demonstrates robustness, particularly with lower-priced inventory meeting first-time buyer demand. The analysis highlights a potential turning point, with localized price stabilization and narrowing rental declines suggesting a broader market recovery might be on the horizon. The key variable for future market performance appears to be the diffusion of price resilience from leading cities like Shanghai to other major urban centers. Investors are advised to focus on cities with strong emerging industries, suggesting a strategic shift towards economic dynamism as a driver of real estate value, rather than solely relying on traditional urban centers. This perspective aligns with long-term trends of economic restructuring and the increasing importance of innovation hubs in driving urban growth.
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