- JPMorgan strategist Rajiv Batra says China’s property market is “approaching a turning point” after five years of correction, with new-home price declines slowing to their softest pace in nearly a year and used-home prices rising in 13 mainland cities in March — the most in almost three years.
- Hong Kong’s real estate recovery is seen as a leading indicator, with Batra arguing that if Hong Kong improves, investors will “extrapolate” the trend to China’s tier-one cities first — creating a cascading wealth effect that revives housing demand on the mainland.
- Chinese housing is now the most affordable since 2016 on a price-to-income basis, and a delayed wealth effect from the rebound in Chinese equities is beginning to flow back into property demand — a positive feedback loop JPMorgan sees as durable.
- Beyond property, JPMorgan sees Chinese equities benefiting from robotics and biotech innovation, AI adoption, government-mandated improvements to shareholder returns, and policy action against the price wars that have compressed margins across multiple industries.
What Happened?
JPMorgan strategist Rajiv Batra, head of Asia and co-head of global emerging markets equity strategy, turned constructive on Chinese stocks, arguing that the country’s battered property market is showing credible early signs of bottoming. March housing data showed new-home price declines at their slowest pace in nearly a year, while used-home prices rose in 13 mainland cities — the broadest increase in almost three years. Batra sees Hong Kong’s real estate recovery as a leading signal that will pull forward sentiment on China’s tier-one cities. He also cited housing affordability at its best levels since 2016 and a delayed wealth effect from the Chinese equity rally beginning to translate into renewed property demand. The MSCI mainland China index has gained nearly 4% over the past month, recovering most of its Iran war losses, though it remains down 2.5% year-to-date.
Why It Matters?
China’s property sector has been the single biggest drag on the country’s economy — and on investor confidence in Chinese assets — for the better part of five years. A genuine inflection in property prices would remove the most persistent headwind for Chinese consumer confidence, household balance sheets, and local government finances simultaneously. JPMorgan is not alone in the call: Eurizon SLJ Capital’s Stephen Jen projected a 10% gain in Chinese stocks by year-end last week. If the property thesis proves correct, it would represent a significant rerating opportunity in an equity market that still trades at a substantial discount to other emerging markets despite its recent rally. The catalyst stack Batra identifies — property recovery, AI adoption, robotics, biotech, and shareholder return improvement — touches nearly every major theme driving global equity flows right now.
What’s Next?
The next monthly housing data release will be closely watched to see whether the March improvement in used-home prices extends to April and whether more cities join the recovery. For investors, the key question is whether the Hong Kong-to-mainland extrapolation holds — or whether tier-two and tier-three city oversupply continues to weigh on the national picture even as first-tier markets stabilize. Beijing’s policy stance on property support, shareholder return mandates, and AI investment will also be critical variables. If the government maintains its current supportive posture while the property floor firms, JPMorgan’s outperformance thesis for Chinese equities versus broader emerging markets could have real momentum heading into the second half of 2026.
Source: Bloomberg
