China’s Second-Home Market Surges in Key Cities
China’s second-hand housing market in major cities has maintained strong momentum through the second quarter of 2026, with transaction volumes accelerating year-on-year and multiple cities recording their highest April figures in years. The sustained activity signals a deepening recovery in the residential property sector, supported by a combination of low mortgage rates, tax incentives, and government-backed “trade-in” housing programs.
According to data from the China Index Academy, second-hand residential transactions in 20 key cities reached 156,000 units in April 2026, up 5.4% month-on-month and 13.4% year-on-year — marking the first monthly year-on-year increase of the year. Thirteen of those cities recorded their highest April transaction volumes in five years. The momentum accelerated into May, with 107,000 units sold between May 1 and May 24, representing a 19.5% year-on-year increase.
Context: A Market in Transition
The current recovery marks a notable shift from 2025’s “price-for-volume” model, when high transaction volumes were driven primarily by price cuts and surging listings. This year, the recovery is characterized by simultaneous volume growth and price stabilization, declining listing inventories, and strong demand from first-time buyers attracted by price-adjusted entry points.
At the end of April 2026, second-hand housing listings in 25 key cities fell 1.6% month-on-month and 4.3% from the October 2025 peak, according to the China Index Academy. Beijing listings dropped 14% and Shanghai listings fell 21% from their respective October 2025 peaks, signaling that quality inventory is being absorbed and homeowners are less inclined to panic-sell.
Beijing and Shanghai Lead the Recovery
Beijing and Shanghai are at the forefront of the rebound. April 2026 second-hand home transactions in Beijing reached 18,000 units, a five-year April record, according to Centaline Property. Shanghai recorded approximately 29,000 second-hand commercial housing transactions in April, the highest April figure in a decade. On May 10, Shanghai set a five-year single-day record with 1,664 second-hand home registrations.
Hangzhou also posted strong results, with April second-hand transactions reaching 9,968 units — up 6.5% month-on-month and 5.8% year-on-year, a five-year April record, as reported by the Hangzhou Beike Research Institute.
Price Stabilization Takes Hold
A critical development is the stabilization of home prices in first-tier cities. Data from the National Bureau of Statistics shows that first-tier city second-hand residential prices rose 0.4% month-on-month in April. Shanghai achieved consecutive monthly price increases in March and April, while Beijing and Shenzhen saw significantly narrowed declines compared to the fourth quarter of 2025. Nationally, 21 out of 70 major cities reported month-on-month new home price increases or stability in April, up from 16 in March.
“Since last year, second-hand housing transactions have been very active, with low-price inventory clearing well, driving improved expectations,” said Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, as reported by Securities Daily. “After several years of market adjustment, panic selling by investors concerned about funding chain risks has decreased, making the market more rational.”
Low-Price Units Drive Transaction Volumes
The recovery is heavily concentrated in affordable housing segments. In Shanghai, units priced under 3 million yuan accounted for 58% of transactions, up 8 percentage points from 2025. In Hangzhou, units under 2 million yuan represented 51.7% of all transactions, according to the China Index Academy and local real estate agencies.
“Since the Spring Festival holiday, various local policies supporting replacement and first-time homebuyer needs — including credit, tax, and household registration policies — have continued to take effect,” said Zhang Bo, dean of the 58 Anjuke Research Institute, in comments carried by People’s Daily. “Mortgage costs remain low, all contributing to market stability.”
Policy Support Underpins Recovery
The recovery has been bolstered by a multi-pronged policy approach. Mortgage rates have fallen to historic lows, with some commercial rates dropping below 3%. The individual income tax rebate policy for home replacement purchases has been extended through 2027, and housing provident fund loan limits have been raised in multiple cities. Many cities have also implemented “trade old for new” programs, where government agencies purchase old homes or facilitate exchanges to stimulate the replacement housing market.
The April 28 Central Politburo meeting emphasized stabilizing the real estate market, prompting cities including Guangzhou, Shenzhen, Tianjin, and Suzhou to subsequently adjust housing policies.
Outlook: A Critical Window
Looking ahead, analysts point to May and June as a crucial period for gauging the sustainability of the recovery. The China Index Academy noted that “this round of demand release is stronger than in previous years,” adding that low-price, small-unit properties remain the core support for the recovery. In the short term, as core cities see continued volume growth in second-hand transactions, market activity is expected to gradually spread to larger-area, higher-price segments.
Li Yujia emphasized the importance of monitoring key indicators: “We need to watch whether second-hand listing volumes, prices, and bargaining space can be maintained; whether the ‘sell old, buy new’ demand cycle can continue; and whether rental yields can stabilize and remain above housing provident fund loan rates.”
While the recovery is encouraging, risks remain. National real estate development investment fell 13.7% in the first four months of 2026, indicating ongoing stress in the development sector. The recovery also remains uneven, with smaller cities continuing to face headwinds even as first-tier and some second-tier markets show robust activity.
For now, the data suggests that China’s housing market is undergoing a structural transformation — shifting from a developer-driven new home market toward a more balanced ecosystem where active second-hand transactions play an increasingly central role.