China Housing Market Shows Signs of Stabilization

Second-hand home sales in China increased by 10.6 percent year-on-year from January to August. New home sales fell by 12.1 percent over the same period. The National Bureau of Statistics reported that transaction volumes for existing homes exceeded new builds for several consecutive months. This shift indicates a structural change in market demand. Officials stated that inventory levels for new commercial housing have decreased for six straight months. The data suggests a gradual improvement in the balance between supply and demand.

Fu Linghui, a spokesman for the National Bureau of Statistics, confirmed these positive changes at a State Council Information Office news conference. He noted that regional governments have adopted tailored measures to optimize housing policies. The focus of these policies is reducing inventories and improving supply quality. Experts believe these steps will pave the way for broader market stabilization. The market is moving away from a model centered on new construction. It is transitioning toward a market dominated by existing housing stock.

Price Declines Narrow Across Cities

Year-on-year declines in new home prices narrowed in 38 of 70 major cities in August. In first-tier cities, the decline rate dropped by 0.2 percentage points month-on-month. Second and third-tier cities each saw a 0.1 percentage point reduction in their decline rates. The used housing market showed similar trends. Forty-eight cities recorded narrower year-on-year price drops for existing homes. First-tier cities experienced a 1.0 percentage point reduction in the rate of decline. Second and third-tier cities each saw a 0.2 percentage point improvement.

Yan Yuejin, deputy head of the E-House China R&D Institute, attributed this stabilization to faster inventory clearance. He stated that this has improved the supply-demand balance. Li Yujia, a residential policy researcher in Guangdong, highlighted the market resilience during a traditionally low season. She expects evident growth in September and October. The stabilization of prices is helping to drive sustained improvements in sales volumes.

Shift Toward Existing Home Transactions

Data from the Ministry of Housing and Urban-Rural Development shows online registrations for secondhand homes reached 550 million square meters in the first eight months. This volume exceeded new-home sales for several consecutive months. Li Yujia explained that most first-time and essential housing demand has shifted to the pre-owned market. The new-home market is now driven primarily by demand for home upgrades. This trend is particularly strong in second and third-tier cities.

The average floor area of newly built homes sold in 50 major cities exceeded 120 square meters per transaction. This metric reflects the shift toward larger, upgraded properties. The supply side has continued to reduce inventories and excess production capacity. This effort has helped bring supply and demand into better balance. As a result, the floor area of new housing awaiting sale has declined for six consecutive months as of August. These figures align with the broader narrative of market adjustment and stabilization. The source GN auto markets/housing: housing prices provides context for these ongoing developments.