China’s Housing Market Enters Stock Era
China’s housing market has crossed a historic threshold: for the first time in the first half of 2026, second-hand home transactions surpassed new home sales, accounting for 50.4 percent of all housing transactions nationwide. According to CCTV News, this milestone marks the official arrival of the “stock era” (存量时代), prompting local governments across the country to deploy tailored strategies to absorb and revitalize existing housing inventory.
A Structural Shift in China’s Housing Market
The transition from an incremental to a stock-dominated market reflects deep structural changes in China’s real estate sector. The Ministry of Housing and Urban-Rural Development (MOHURD) has confirmed that the market has moved from the “incremental era” to the “stock era,” with 18 provinces and municipalities—including Beijing, Shanghai, Jiangsu, and Guangdong—seeing second-hand residential transaction areas exceed new home sales.
National Bureau of Statistics Deputy Director Mao Shengyong noted that the traditional incremental transaction pattern dominated by new home sales is accelerating its transformation toward a pattern where new and second-hand homes coexist, as reported by Red Star News.
The policy framework for this transition was established at the Central Economic Work Conference in December 2025, which called for “city-specific policies to control increment, reduce inventory, and optimize supply” and encouraged the purchase of existing commercial housing primarily for affordable housing purposes, as Xinhua reported.
Guangzhou: Pioneering Completed-Housing Sales
In a significant innovation, Guangzhou’s Nansha District has listed the city’s first residential land plot under a “completed-housing sales commitment system” (现房销售承诺制). The 2026NJY-3 plot, covering 138,000 square meters with a starting price of 1.907 billion yuan, requires the winning bidder to commit to selling completed homes on one of the sub-plots—a departure from the traditional pre-sale model.
According to Phoenix Real Estate, the land sale also allows for installment payment of land transfer fees, with at least 50 percent due within 30 days of signing and the remainder within two years. This flexibility is designed to alleviate upfront capital pressure on developers while the completed-housing requirement addresses buyer trust concerns.
The Nansha land sale is also the first in the district to require compliance with Guangzhou’s “good housing” (好房子) quality construction standards as a condition for land acquisition. Zhang Rui, Deputy Director of the Nansha District Housing and Urban-Rural Development Bureau, explained that “completed-housing sales solve the trust issue of whether homes can be delivered on time, while the ‘good housing’ standard answers the quality question of whether the delivered homes are good.”
Chen Xueqiang, Research Director at the China Index Academy Guangzhou Branch, said the listing “marks the official implementation stage of Guangzhou’s ‘15th Five-Year Plan’ housing plan and the ‘Nansha Ten Measures’ policy,” as Southern Metropolis Daily reported. Nationwide, 39 regions have piloted completed-housing sales or introduced related support policies since late 2022.
Qingdao: Procurement Based on Demand
In Qingdao’s Chengyang District, a state-owned platform company has pioneered the “procurement based on demand” (以需定购) model, purchasing existing housing stock from developers and converting it into for-sale affordable housing. The program has been remarkably successful: two batches totaling 173 units sold out on the day they were listed, with sales prices approximately 60 percent of comparable commercial housing in the area.
The second batch of 85 units at the Heda Smart Eco-City project, priced at 4,402 yuan per square meter, attracted 309 qualified families competing for selection, as Xinwang reported. The units, including 88 and 108 square meter three-bedroom apartments, sold out immediately upon release, with the full selection process conducted under public supervision.
This model represents a dual win: it provides affordable housing for working families while helping developers reduce inventory, as 163.com noted.
Hangzhou: Purchase Instead of Construction
Hangzhou has adopted the “purchase instead of construction” (以购代建) model to expand its rental affordable housing supply. The Hangzhou Anju Group purchased four buildings with over 1,200 units from developers and converted them into rental affordable housing—the largest stock-conversion rental project in the city. Since opening in January 2026, the project has achieved a 96 percent occupancy rate.
According to Hangzhou Net, the city’s stock purchases target existing homes under 70 square meters for rental conversion or under 125 square meters for for-sale conversion, with buildings required to be independently standing units. Acquisition prices are capped based on the principle that “rental income covers costs.”
Lu Xuan, a staff member at the Hangzhou Housing Rental Management Service Center, noted that there are no income or household registration restrictions for these converted rental units, making them accessible to various types of new citizens and young people. The government provides supporting policies including fiscal and tax reductions and residential water and electricity prices.
Shanghai: Activating Second-Hand Home Market
Shanghai has taken the innovative step of purchasing second-hand homes directly from residents for conversion to rental affordable housing. Launched as a pilot in February 2026 across three districts, the program has expanded to all central districts by May. As of July 25, the three initial pilot districts had purchased 551 units, with 16 households completing home replacement purchases, according to The Paper.
In Xuhui District, where 480 households have participated, the program includes a “sell old, buy new” (卖旧买新) model that allows residents to use proceeds from selling their second-hand homes to offset the purchase price of a new home. This mechanism is designed to activate housing improvement demand.
The program appears to be having a measurable impact on Shanghai’s housing market. From March to June 2026, second-hand housing transactions totaled 101,000 units, up 20 percent year-on-year and at a five-year high. Monthly transactions have exceeded 20,000 units for eight consecutive months, and the second-hand housing price index has been positive for five consecutive months since February, as China Real Estate News reported. The first batch of renovated homes is expected to be available for rent by September 2026.
Analysis: Toward a New Housing Model
These varied approaches reflect a broader strategic shift in how China manages its housing market. Yan Yuejin, Deputy Director of the Shanghai E-House Real Estate Research Institute, observed that the continued rise in second-hand home transactions is “an objective reflection of industry structural transformation,” noting that China has entered a stage dominated by existing housing stock.
Wu Jing, Director of the Tsinghua University Real Estate Research Center, recommends that each city design the most suitable stock absorption and revitalization measures based on local conditions. He advocates for expanding policy-based financial tools to support richer stock absorption models, including the absorption of second-hand homes from residents, which could accelerate the nationwide rollout of these initiatives.
The combination of completed-housing sales commitments, demand-based procurement, purchase-instead-of-construction, and second-hand home acquisition represents a comprehensive toolkit for managing the transition to a stock-dominated market. As Sohu noted, these innovations are shifting the housing supply logic from solving “whether there is housing” to pursuing “whether the housing is good.”
What to Watch
Several developments merit close attention in the coming months. The online bidding period for the Nansha land plot runs from August 18 to 28, with the auction scheduled for August 28—the outcome will signal developer appetite for the completed-housing sales model. Shanghai’s first batch of renovated second-hand homes is expected to hit the rental market by September, providing an early test of demand for converted rental housing. And the continued expansion of policy-based financial tools could determine how quickly these tailored stock absorption strategies scale across the country.
As China’s housing market navigates this historic transition from new construction to stock management, the success of these city-specific experiments will shape not only the future of the real estate sector but also the broader trajectory of urban development and housing affordability in the world’s second-largest economy.