Goldman Sachs: Experts in the domestic real estate industry expect resilient transaction volume in the fourth quarter, with Shanghai continuing to lead the recovery in prices.

Goldman Sachs released a research report stating that on September 7, the bank invited Li Yangguo, the founder of Iceberg Index, as the second speaker in the series of conference calls with property experts in China for 2026. The Iceberg Index is based on a digital analysis system of transaction prices in approximately 70/40 cities' second-hand properties, providing timely reflection and prediction of market trends in price and volume. After entering August, the month-on-month decline in the price of second-hand properties in most cities has again widened. However, the transaction volume in the first week of September saw a noticeable rebound, providing a positive start to the traditional peak season of "Golden September and Silver October." Li Yangguo maintains a constructive outlook on transaction volume for the fourth quarter of 2026, expecting it to exceed the same period last year. However, as the volume of new listings rises, prices may weaken marginally, with significant risks concentrated in the higher-end segments of second-tier cities. Looking ahead to 2027, if transactions continue to outpace new listings and this trend extends into next spring's sales season, Shanghai is expected to lead a comprehensive price recovery, with property prices projected to rise by 6% to 12% by the end of 2027. Shenzhen may follow closely, while most core cities are anticipated to stabilize around the end of next year. Suzhou and Hefei have already shown signs of stabilization, and some lower-tier cities in the central and western regions have also experienced month-on-month price improvements, with cities like Xuzhou showing a clear upward trend in transaction volume. Regarding the policy implemented on August 28 that requires a shift to selling finished properties, Li Yangguo believes the short-term impact is not significant, but he expects it to support the market in 2027 to 2028 by reducing future new supply.