China's Housing Market 'Enters the Inventory Era'

Chinese real estate has "entered an inventory era," with 52 percent of housing deals in the first eight months of 2026 being second-hand, officials said at a State Council Information Office press conference on Friday.

In launching the 15th Five-Year Plan (2026-2030) policy briefing series, the Ministry of Housing and Urban-Rural Development highlighted two major market shifts: a fundamental reshaping of housing supply and demand and the arrival of the inventory-dominated stage.

The proportion of second-hand house transactions has surged from 27 percent in 2020 to 46 percent in 2025, crossing the 50 percent threshold this year, according to the ministry.

China will accelerate the development of a new real estate development model and optimize its housing system with multi-agent supply, multi-channel guarantee, and equal rental and purchase rights.

A core policy focus is promoting nationwide ready-for-use home sales. Replacing the traditional pre-sale model, the reform implements "payment upon handover" and "what you see is what you get" to minimize housing delivery risks.

Ready-to-use home sales are now the preferred option for new residential projects, and pre-sale access thresholds are significantly raised. Retained pre-sale projects will have strict pre-sale fund supervision to protect homebuyers' rights.

Yan Yuejin, an analyst with E-House China R&D Institute, said the pilot mainly covers high-quality individual plots, causing only temporary and local supply gaps with no substantial impact on overall market supply and demand.

But Li Yujia from the Guangdong Provincial Housing Policy Research Center said it can ease cut-throat market competition in the long run, facilitate existing inventory digestion, and stabilize regional housing prices.

Beyond risk prevention, the sales model restrains developers' blind expansion and homogeneous low-end housing development, forcing enterprises to improve product design, community supporting facilities, and property services based on market demand, analysts said.