China's Housing Inventory Falls for Sixth Straight Month
New home sales dropped 12.1% year-on-year, yet overall market activity stabilized as second-hand transactions rose 10.6% and inventory cleared for six consecutive months.
Sales of new homes in China fell 12.1 percent year-on-year from January to August. This decline marks a sixth consecutive month of falling inventory for newly built housing. The drop in new construction sales coincided with a 10.6 percent rise in registered second-hand home transactions. These opposing trends indicate a structural shift in the domestic property sector.
Fu Linghui, spokesman for the National Bureau of Statistics, confirmed these figures at a State Council news conference. He noted that the year-on-year decline in home prices has narrowed. The pace of inventory reduction for new homes has also accelerated. These factors suggest a move toward a more balanced supply-demand situation in the coming months.
Second-Hand Market Drives Activity
Online registrations for secondhand home sales reached 550 million square meters in the first eight months. This volume exceeded new-home sales for several consecutive months. The data comes from the Ministry of Housing and Urban-Rural Development. The shift reflects a market dominated by existing housing stock rather than new developments.
Yan Yuejin of the E-House China R&D Institute noted that this stabilizes overall market activity. He stated that the demand side has seen sustained improvement in sales. This improvement follows the stabilization of housing prices. The sector is transitioning from new-home sales to transactions of existing homes.
Price Declines Narrow Across Cities
In August, 38 of 70 major cities saw year-on-year declines in new-home prices narrow. The drop narrowed by 0.2 percentage points in first-tier cities. It narrowed by 0.1 percentage point in second and third-tier cities. In the used housing market, 48 cities recorded a narrowing of price declines.
The reduction in price drops was 1.0 percentage point in first-tier cities. Second and third-tier cities each saw a 0.2 percentage point improvement. Li Yujia, a researcher in Guangdong province, described this as market resilience. He noted these changes occurred during a conventionally low season.
Inventory Reduction Shapes Supply
The floor area of new housing awaiting sale declined for six consecutive months. This trend continued through August nationwide. Li Yujia explained that most first-time housing demand has shifted to the pre-owned market. The new-home market is now driven by demand for home upgrades.
Average transaction sizes for new homes in 50 major cities exceeded 120 square meters. This reflects a focus on larger, upgraded units in second and third-tier cities. Officials from GN auto markets/housing: housing prices report that regions have adopted tailored policies. These measures focus on reducing inventories and optimizing supply to balance the market.
