Citi: Mainland property transactions strong during Golden Week; secondary-market demand leads recovery in transaction volume.

Citi released a research report stating that during the Mainland Golden Week, both primary and secondary property transactions performed strongly, with policy transmission appearing broader and more consistent in the secondary market; secondary transactions in the 26 cities tracked by the bank rose 53% year-on-year, with all cities recording growth, while primary sales in 13 cities rose 41% year-on-year, though improvement was concentrated in a few cities and underlying performance remained polarized. The bank noted that in the primary market, new home registrations in the 13 tracked cities rose 41% year-on-year, from 1,991 to 2,812 units, mainly driven by Hangzhou, Nanjing, Ningbo and Beijing, which rose 347%, 259%, 244% and 145% year-on-year respectively. Among first-tier cities, Beijing clearly outperformed, while Guangzhou, Shanghai and Shenzhen fell 2.2%, 7.2% and 42% year-on-year respectively, partly due to limited supply; Chengdu also fell 40% year-on-year. The bank believes the wide divergence shows that the recovery in the primary market has not yet spread across the board. In the secondary market, transactions in the 26 tracked cities increased from 18,038 to 27,720 units, with every city recording growth. Regional hub cities led the gains, including Qingdao, Nanchang, Xuzhou and Hefei, which rose 111%, 97%, 95% and 94% year-on-year respectively. First-tier cities also improved in tandem: Shanghai rose 75% year-on-year, Beijing rose 51%, Shenzhen rose 40%, and Guangzhou rose 35%. The bank believes the broad participation across all tiers of cities supports the view that secondary demand is leading the recovery in property transaction volume.