China Property Market Stabilizes on Policy Support Effect

After a prolonged downturn that reshaped China’s economic landscape, the country’s property market is flashing early signs of stabilization. Core cities — Beijing, Shanghai, and Shenzhen — are leading a tentative recovery, driven by a coordinated wave of government policy support implemented through the first half of 2026.

According to a mid-year market analysis published by Xinhua News, the property market in H1 2026 is characterized by “bottoming-stabilization, structural divergence, and stock-led” dynamics, with second-hand housing transactions significantly outperforming new home sales.

Policy Support Takes Center Stage

The shift in momentum began in late 2025, when the Central Economic Work Conference signaled a change in direction. By March 2026, Premier Li Qing’s Government Work Report formally adopted the language of “focusing on stabilizing the real estate market” — a deliberate departure from the previous emphasis on merely “halting the decline.”

As Yicai Global reported, this policy recalibration marked a transition from crisis management to a new phase centered on “good housing and new models.” Multiple central ministries subsequently issued coordinated policy packages, while cities implemented locally-tailored measures including purchase restriction optimizations, housing provident fund quota increases, trade-in programs, and mortgage rate cuts.

Core Cities Lead the Recovery

The data from key cities tells a compelling story of recovery at the top end of the market.

In Beijing, the Poly Xirui project in Haidian district launched on June 27 at approximately 125,000 RMB per square meter. All 50首批 140-square-meter units sold out on opening day, with over 30 larger units also finding buyers. In Shenzhen, the Bay Antiyuan project sold all 72 units on launch day at an average registered price of 185,800 RMB per square meter.

These high-end project successes reflect a broader trend. Shenzhen saw multiple “sold-out-in-a-day” projects in May, including Longfor Guancuiyuan in Guangming district, which moved 92 units in just 40 minutes.

Second-Hand Market Shows Broad Strength

Perhaps the most significant signal comes from the second-hand market, which is acting as the primary engine of the recovery.

According to data from the Beijing Housing Authority cited by 36kr, Beijing’s second-hand home registrations exceeded 16,600 units in June 2026 — up approximately 4% month-on-month and 10% year-on-year. The first half of 2026 saw a total of 93,583 second-hand transactions in the capital, the highest figure in five years.

Shenzhen’s second-hand market also showed robust activity. The Shenzhen Beike Research Institute reported over 36,458 second-hand units sold in H1 2026, up 5.5% year-on-year, contributing to total new and second-hand transactions exceeding 67,000 units.

Shanghai’s market dynamics are shifting notably. Data from Shanghai Lianjia reveals a transition from a rigid-demand-dominated market to one co-driven by upgrade demand. In March, units under 3 million RMB accounted for approximately 60% of transactions. By June, the 3-5 million and 5-8 million price segments had grown by 13% and 17% respectively, signaling that homeowners are trading up.

Inventory Pressure Easing

On the supply side, there are encouraging signs of inventory normalization. The E-House China Research Institute tracked eight key cities — Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Nanjing, Chengdu, and Wuhan — and found that second-hand listings stood at 1.23 million units at end-June 2026, down 90,000 from end-2025 and down 280,000 (19%) year-on-year.

Yan Yuejin, deputy director of the Shanghai E-House China Research and Development Institute, told Xinhua that “the comprehensive decline in second-hand housing listings in key cities fully reflects that market supply-demand relations are further improving, creating favorable conditions for the real estate market to stabilize.”

National Picture: Still Divergent

While core city data is encouraging, the national picture remains mixed. The China Index Academy reported on July 1 that 100-city new home prices rose a cumulative 0.59% in H1 2026, while second-hand prices declined 2.9% over the same period. June data showed new home prices averaging 17,184 RMB per square meter (up 0.16% month-on-month) and second-hand prices at 12,639 RMB per square meter (down 0.42% month-on-month).

As CNR/China News Service reported, analyst Zheng Jun Tong of the China Index Academy noted that “the real estate market is generally still in a bottoming-out process, with continued divergence in recovery.” He added that stabilizing second-hand listings in core cities, combined with modest rent increases in first-tier cities, should strengthen the foundation for price stabilization in the second half of the year.

Land Market Signals Confidence

Land auctions in recent months have seen intense bidding, with hundreds of rounds in some cases. The China Index Academy found that the top 20 cities accounted for 62% of national residential land sale revenue in H1 2026, up 10 percentage points from fiscal year 2025. Shanghai led with 52.1 billion RMB in land sales, followed by Hangzhou at 48.5 billion RMB.

Three Bottlenecks Remain

Despite the encouraging signals, Zhang Bo, president of the 58 Anjuke Research Institute, cautions that “the stabilization signal in the second-hand housing market is clear, while new homes in many cities are still in a bottoming-out phase.” He identifies three major bottlenecks that must be overcome for a comprehensive national recovery: market expectations, inventory digestion, and entity credit.

What to Watch in H2 2026

The coming months will be critical. July is historically a slow season due to summer heat, and last year saw a sharp drop-off from June. Experts expect further policy measures to stimulate home replacement demand, while supply-side adjustments will continue under the mantra of “control increments, reduce inventory, optimize supply.”

The divergence between core and lower-tier cities is likely to persist. But for now, the data suggests that after years of contraction, China’s property market may finally be finding its footing — at least in the cities where most of the country’s economic dynamism is concentrated.