China Property Signals (#45): An LLM Sentiment Index As An Indicator For What To Expect From Upcoming Monthly Data
About this Newsletter: Get a quick but more granular view of (still) one of the most important sectors in China, with the weekly chart and commentary from Real Estate Foresight (REF) - drawing on 14+ years of REF's research on China housing markets.
Over the last couple of months, at Real Estate Foresight (REF), we have been developing a set of new market sentiment indicators for China's housing market (China Housing Sentiment Index, or "CHSI"), including a subindex focused on secondary home prices.
Investors typically watch the official secondary home price growth rates as a gauge of when the market will start bottoming out, considering that, unlike the primary home market, the secondary market is not subject to price controls and the NBS price growth indices are less distorted by composition changes.
The chart below shows the 70-city average of the official NBS price growth indices (the red line) for August (latest data released on September 15) vs the CHSI price sentiment subindex (the blue line) to end-September:
The official NBS September 2026 data is due the coming Monday, October 19, and the sentiment metric suggests no major change in pattern for September, possibly a slight improvement vs August.
In a longer-term view, note the strong correlation between the two series:
These sentiment indices we are developing are based on LLM-assessed sentiment in the curated set of local online news covering the property market (both primary and secondary residential sectors). The purpose is to answer the question "How is the market being described in the news today, relative to normal?" A rising trend means coverage across developers, prices, transactions, policy, and buyer confidence is turning more positive than each news source's typical tone. A falling index means coverage is turning more cautious or negative.
To discover more about our work on China property, please message Robert Ciemniak directly or visit https://www.realestateforesight.com