China Property: Developers' sales still soft in September, although the decline narrowed

According to CREIS, the top 100 developers' sales Y/Y decline narrowed from -17% in August to -11% in September. However, when compared to the 4-year average prior to the liquidity crisis (2018-21), the 80% decline hit the steepest level since 2021. That said, with the recent policy of mortgage subsidies (announced on September 29 and effective on October 1), we expect there would be some marginal short-term boost to sales volume, especially in low-tier cities. On the back of this, we expect the sales decline to narrow to a single digit % in October, but for now we do not pencil in a strong Y/Y rebound, as we think the Rmb50K cap on mortgage subsidies may not substantially move the needle. Year to date, the top 100 developers' sales have declined 13% Y/Y so far, and we forecast a 12% Y/Y decline for the full year of 2026, implying a 9% Y/Y decline in 4Q26. Despite the likely continual softness in the primary market, we expect secondary sales to stay solid with >10% Y/Y growth. Our top