UBS: Improved property ownership intentions in first-tier cities in mainland China, optimistic about China Overseas (00688) and others.

UBS released a research report stating that, based on the latest survey of the Chinese real estate market, among 2,500 respondents, the percentage of respondents who plan to purchase property in the next two years has increased from 20% in April 2025 to 31% in May 2026. In first-tier cities, this percentage has increased from 32% to 43%, with Beijing and Shanghai reaching 51% and 43% respectively, the highest level since 2017. This reflects a possible improvement in market sentiment, mainly driven by the growth in profits of AI supply chain-related industries and the wealth effect driving demand for high-end properties, as well as the increase in the upper limit of housing provident fund loans and the decrease in interest rates benefiting the transactions of small and medium-sized second-hand homes. The bank is bullish on China Overseas (00688), China Res Land (01109), and BEKE-W (02423), all of which are rated as "buy".