Property update—still in the gloom

At the heart of China’s economy, as it has been said many times, is the property market. And so, keeping an eye on this market, which has been on a slide now for several years, is important. People are always looking for some signs of the bottom of the market being reached, but there’s basically little or nothing to grasp on to yet. There is a vast quantity of vacant apartments out there all over China, land sales by local governments continue to slide, and prices in only a select few places around the country show any signs of defying gravity.

The news this week that relates includes a report that revenue from residential land sales in Beijing was down 66% in the first half of 2026, but at the same time, a handful of prime plots in the city attracted fierce bidding among developers. That points to an obvious trend—property developers have abandoned the long-standing policy of aggressive expansion because the first job is to soak up inventory, and focus instead on prime parcels in key cities, of which Beijing is of course one. 

Another is Hong Kong where the property market has been doing quite well in the past month or two, due in part to people abandoning Dubai in the face of war and potential missiles, and the overall prime office vacancy rate in the enclave fell to a seven-month low in May, with premium offices in key locations at close to full occupancy. There also seems to be core buying activity in Shanghai and a couple of other major cities, but it’s cherry picking and not enough to declare a turnaround.

To round it out, Evergrande, once the biggest property developers in China and now flat out and bankrupted, ls back in the news this week and not in a positive way. Talks to sell a controlling stake in Evergrande Property Services collapsed after liquidators of the parent failed to reach a formal agreement with a prospective buyer, it was reported. That prospective buyer, interestingly, was a state-owned player in Guangdong, and the fact that even the system won’t touch it suggests ever more that Evergrande is ever gone.

Have a good weekend.