Q1 2026 China Real Estate Summary and Outlook

Ask AI · How can policy shifts aimed at improving quality and efficiency reshape real estate developers’ growth paths?

Part 1

Policy Section

A new-stage policy implementation framework to build a new model for high-quality development

In 2026, at the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference, China’s real estate policies will continue the core logic of “stabilizing and recovering after a downturn,” fully entering a high-quality development stage focused on “improving quality and efficiency.” Around six dimensions such as stabilizing the market and protecting people’s livelihood, a complete policy implementation system will be formed. At the local level, across the country, 107 provinces and cities have issued 175 market-stabilizing measures. With public housing fund optimization, quality improvements, tax and fee subsidies, expanding affordable housing, and activating existing inventories as key priorities, they will actively implement central deployments. In many places, newly issued policies have helped the market stabilize and gradually warm up.

Looking ahead to the full year of 2026, it is expected that central policies will follow the main line of “stabilizing the market, preventing risks, building long-term mechanisms, and promoting transformation,” fully implementing a policy system of “controlling incremental supply, reducing inventories, and optimizing supply.” This will coordinate risk resolution, institutional reform, and people’s livelihood protection, accelerating the construction of a new model for real estate development. At the local level, provinces and cities will align with central deployments and continue to exert efforts across four dimensions: improving product quality, providing demand-side targeted support, expanding the coverage of housing security, and activating stock land resources, thereby pushing the market to shift from “repairing” to “improving quality and efficiency,” promoting long-term balance between supply and demand, and helping the industry smoothly enter a new high-quality development cycle.

01

Systematically resolving real estate risks and building a complete policy implementation framework in six areas

At the beginning of 2026, the central government’s real-estate-related deployments continued the core logic of 2025—“a recovery-oriented approach and stabilizing after a downturn”—while achieving an all-around upgrade in policy precision, system-wide coordination, and practical implementation. Based on the content released at the two sessions, compared with 2025, whose policy orientation focused on “providing basic support and building a framework,” in 2026 a more complete policy implementation framework has been formed around six dimensions including market stabilization, people’s livelihood protection, and new-type urbanization. This indicates that China’s real estate industry is accelerating its shift from the “repair stage of stabilizing after a downturn” into a new high-quality development stage of “improving quality and efficiency and building long-term mechanisms.”

1. Market stabilization and risk prevention: from single-point emergency measures to systematic resolution across fields

In 2026, the core of this dimension is two-way demand-and-supply regulation plus risk prevention and joint response across the entire chain. It clearly calls for “implementing city-specific policies to control incremental supply, reduce inventories, and optimize supply,” and will make revitalizing existing residential properties through multiple channels a core lever for market stability. At the same time, the “delivery-guarantee-for-completed-homes” (bao jiao fang) whitelist system will be normalized. For the first time, it will also propose coordinating and advancing the joint resolution of risks in real estate and local government debt, as well as risks in local small and medium financial institutions. Monetary policy will also specifically create a dedicated financial environment to support reasonable real estate financing.

2. People’s livelihood protection: from broad-based safety nets to targeted empowerment by household demographics

The highlights for people’s livelihood protection in 2026 lie in combining affordable housing construction with clearing existing inventory plus adopting family-oriented targeted support. On the one hand, it will continue the approach of acquiring existing commercial residential properties for the construction of affordable housing. On the other hand, it will introduce new measures such as “strengthening housing security for newly married and newly child-bearing families” and “supporting housing improvement needs for families with multiple children,” thereby deeply linking housing security with population policies and enabling precise “targeted drip irrigation” for people’s livelihood protection.

3. New-type urbanization: from pushing for speed by scale to deepening mechanisms for better quality

In 2026, the integration between new-type urbanization and real estate will be more targeted and more implementable. Further improve the “linking people, land, and money” policy, so that the urbanization of agricultural migrant populations can form a more precise matching mechanism with land supply and fiscal support. Urban renewal emphasizes “promoting high-quality implementation.” Meanwhile, revitalizing existing stock land and idle buildings, and coordinating the layout of county-level basic infrastructure and public resource allocation will be combined. For the first time, counties will be listed as an important lever for the development of new-type urbanization and real estate.

4. Improving housing quality: from introducing top-level concepts to fully implementing practical projects

2026 is a critical year for “good homes” to move from concept to practice. Not only will it orderly promote the construction of “good homes” featuring safety, comfort, green features, and smart features, but it will also issue specific implementation measures—implementing a housing quality improvement project and a property service quality improvement campaign. At the same time, housing quality improvement will be extended to urban space. It proposes building innovation-oriented industrial communities and business communities, promoting the integration of housing quality with intelligent, fine-grained urban governance.

5. Housing system reform: from building basic frameworks to deepening specific institutional mechanisms

The core of housing system reform in 2026 is to address shortfalls and build supporting systems. It will clarify “deepening reform of the housing provident fund system” as an important lever. At the same time, it will propose building basic institutions and supporting policies for further advancing a new model for real estate development. It will shift from the “framework-building” stage in 2025 to “filling in content and weaving supporting systems,” providing concrete institutional support for the new model of real estate development.

6. Fiscal and financial supporting measures: from generalized empowerment to precise coordination with mechanism-based risk buffers

In 2026, fiscal and financial supporting measures will form a coordinated force that both keeps the scale of funds stable and strengthens precision and mechanism guarantees. On the fiscal side, local government special-purpose bonds will remain arranged at 4.4 trillion yuan, same as 2025. But the direction of funds will be further focused: it will clearly prioritize support for “major project construction (including real-estate-related people’s livelihood projects) and the refinancing/replacement of hidden government debt.” Real-estate-related fiscal spending will be strictly anchored to “people’s livelihood projects,” excluding generalized investment and construction directions. Meanwhile, strict compliance with a negative list for the uses of special-purpose bond proceeds will be enforced, forbidding funds from being used for real estate development fields other than affordable housing and land reserve activities. This will further standardize how funds are used. On the financial side, the core is to smooth transmission channels plus shared risk-bearing. Building on the continuation of conventional monetary policy tools such as cuts to reserve requirement ratios and interest rates, it will place greater emphasis on “improving the transmission mechanism of monetary policy,” guiding financial institutions to proactively support reasonable real estate demand. It will promote the regular operation of city-level real estate financing coordination mechanisms. At the same time, it will optimize and innovate structural monetary policy tools. For the first time, it will propose “strengthening support measures such as financing guarantees and risk compensation,” helping financial institutions eliminate worries about supporting real estate, and addressing problems like “lending unwillingly” and “lending not daringly” caused by information asymmetry between banks and enterprises.

02

Tightly control new construction land for real estate development and promote the revitalization of existing urban stock space with improved quality

On the supply side, central ministries and commissions will further advance stock revitalization and restrict ineffective increases in inventory. On January 20, the Ministry of Natural Resources issued a document supporting urban renewal, encouraging the use of existing land and property resources to develop industries supported by the state. Objectively, this will also promote further acceleration of the revitalization of existing residential land.

In early March, the Ministry of Natural Resources released the “Notice on Further Doing a Good Job in Natural Resource Element Security,” in which the scope of matters was reduced from the previous year’s 15 items to 13, significantly increasing policy focus. Among them, Article 10 on “coordinating stock and incremental construction land to promote intensive development” put forward a stricter control requirement for incremental supply, which quickly became a focal point of industry attention, and set new rules for the supply pattern of residential land.

The document’s provisions clearly state: the annual increase in urban and rural construction land generally must not exceed the area of land being revitalized from stock; and incremental construction land shall generally not be used for profit-oriented real estate development. It needs to be explained that when urban construction land indicators move from “new allocation” to “actual entry into the market,” it generally must first be approved as stock construction land awaiting development, and then go through a longer-level primary development process. The actual supply of real-estate land in different places mainly comes from stock construction land. Therefore, this adjustment will not cause substantive impacts on the land supply side in the short to medium term. In addition, since the real estate market is still in the long adjustment cycle on the supply side, restricting incremental real estate development land is also conducive to stabilizing long-term supply-side expectations, helping the market move faster toward a new balance point between supply and demand.

For market entities, developers participating in people’s livelihood projects such as affordable housing will become one of the mainstream directions, while profit-oriented development will fully turn to tapping and unlocking potential in existing stock. For land supply by local governments, incremental urban construction land will mainly rely on stock construction land awaiting development, and revitalizing stock residential land will be placed in an even more important position. The Ministry of Natural Resources’ documents also specify detailed rules such as handling idle land, coordinating provincial indicators, and supporting scattered plots, further consolidating the institutional foundation of “stock first.”

Under these policy constraints, the actual movements of stock residential land are both the prerequisite for policy implementation and a key basis for judging market supply and connecting subsequent policy actions. According to data released by local governments, from 2025 to 2026, the scale of stock residential land in 107 cities across the country continues to shrink; stock revitalization is being effectively advanced. In sample cities, the total number of projects increased by 2% year-on-year, and the total area of stock residential land declined from 6.23 million hectares at the beginning of 2025 to 8B hectares at the beginning of 2026, a year-on-year decrease of 4%. The average area per single project fell by 6%, from 4.5 hectares to 4.2 hectares, forming a favorable trend of “overall quantity shrinking while high-quality projects are added.”

At present, localities are continuing to strictly implement the direction set by top-level policies. On the one hand, they will strictly control the supply of incremental residential land, simultaneously advance new policies for disposing of idle land, intensify cleanup of inefficient stock land, and push a number of idle or inefficient projects out of the market. On the other hand, they will precisely replenish high-quality residential land and continuously improve land-use efficiency. Among these efforts, localities are actively using special-purpose bond funds to acquire and store idle land. Based on incomplete statistics, in 2025 alone, more than 300 billion yuan of special-purpose bonds were issued nationwide for this purpose. Guangdong issued 48.6 billion yuan, ranking first in the country, providing strong funding support for the revitalization of idle land.

03

Optimizing adjustments to “three red lines” regulatory requirements to accelerate the construction of a new industry financing mechanism

In the first quarter of 2026, central real estate financial policies closely followed the core orientation of the industry improving quality and efficiency and building long-term mechanisms, accelerating institutional transformation to better match a new model for real estate development. In the first quarter, monetary policy maintained a loose orientation. For example, the People’s Bank of China continued using tools such as reductions to reserve requirement ratios and interest-rate cuts to maintain ample liquidity, lowered the interest rates on structural monetary policy tools, and smoothed policy transmission to lower the overall social financing costs. It also optimized multiple structural tools. The minimum down payment ratio for commercial property purchase loans was lowered to 30%, which precisely supported clearing inventory in office and commercial real estate and created a suitable financial environment for the stable operation of the real estate market.

Real estate financing coordination mechanisms accelerated their transition to regular operation. Regulators significantly optimized the “whitelist” project loan extension policy: loans for eligible projects can be extended up to five years. This effectively eased developers’ project-side cash flow and turnover pressure. Combined with the sustained strengthening of the “delivery-guarantee-for-completed-homes” whitelist system, industry liquidity risks were orderly mitigated.

The most emblematic adjustment in this round of financial policy is an important shift in the financing regulation for developers. The monthly reporting requirements under the “three red lines” implemented since 2020 are gradually being loosened. Most developers are no longer required to regularly report the relevant indicators. Regulators’ focus has shifted to differentiated risk control for developers that show signs of trouble. This adjustment clearly signals the easing of financing constraints for the industry and removes institutional obstacles for rebuilding a real estate financing system adapted to the new model.

Based on financial data, in February 2026, M2 increased by 9% year-on-year, with the growth rate up 0.4 percentage points from December 2025. M1 increased by 5.9% year-on-year, with the growth rate up 2.1 percentage points from December 2025. The difference between the two is 3.0 percentage points, down 1.7 percentage points from December 2025. The gap once again continued to narrow, showing that real-economy development has further accelerated and that the start of the year has been off to a good start.

Overall, in the first quarter of 2026, real estate financial policies are no longer limited to short-term risk disposal. Instead, they center on institutional building and, through optimization of regulatory rules, innovation in financing mechanisms, and coordination between fiscal and financial policies, they fully adapt to the requirements for constructing a new model for real estate development. This provides sustained financial support for the market to stabilize after a downturn, and it also lays a solid foundation for the industry to move toward long-term high-quality development and achieve the goals of “rent-and-buy coexistence” and “living somewhere to belong.”

04

Localities: In 107 provinces and cities, 175 policies to stabilize the market in the first quarter; after Shanghai’s new policy, residential transactions arrive as scheduled with a “small spring-like” rebound

In the first quarter of 2026, local real estate control and adjustment policies continued to be optimized. According to CRIC statistics, across the country, 107 provinces and cities introduced 175 market-stabilizing policies. In the first quarter, localities mainly used public housing fund optimization as the key lever, while also balancing subsidies and tax/fee advantages, as well as new policies to ensure housing stability and security. They actively promoted market stabilization. Led by Shanghai’s “Seven Articles on Real Estate” (Hu Qi Tiao), benefiting from a major relaxation of purchase restrictions for non-local household registrations and a significant increase in public housing fund loan limits up to a maximum of 3.24 million yuan, new-home transactions in early March recorded year-on-year growth, and second-hand home transactions in mid-March even hit the highest level in nearly five years.

05

Central government: Entering a new stage of improving quality and efficiency, fully building a policy system of “controlling incremental supply, reducing inventories, and optimizing supply”

Judging from the policy orientations issued by central ministries and commissions in the first quarter of 2026, real estate policies in the new year have fully moved past emergency-style backstops. From the recovery stage of stabilizing after a downturn, they are accelerating the shift toward a new high-quality development stage focused on improving quality and efficiency and building long-term mechanisms. With “controlling incremental supply, reducing inventories, and optimizing supply” as the core, a top-level policy system that is integrated across the entire chain, across domains, and coordinated has been established, laying an institutional foundation for industry transformation and long-term stability.

Supply-side regulation will fully shift toward prioritizing stock and precisely improving quality. “Controlling incremental supply, reducing inventories, and optimizing supply” will move from policy orientation to rigid implementation. The central government will continue to implement the requirement that new construction land must not be used for profit-oriented real estate development, further promoting localities to revitalize stock land and idle housing resources. This will drive residential land supply from incremental expansion to tapping stock inventories. Multiple channels for revitalizing stock commercial housing will become the core lever for market stability. The model of acquiring stock housing resources for affordable housing, talent housing, and resettlement housing will be normalized, achieving two-way empowerment of inventory reduction and people’s livelihood protection, and helping the market move faster toward a new balance between supply and demand.

Risk prevention and control will be upgraded to systematic resolution across fields, breaking through the limitations of resolving risks from a single subject or a single risk type. The central government will coordinate and advance joint resolution of risks in real estate with local government debt and with risks in local small and medium financial institutions. The “delivery-guarantee-for-completed-homes” whitelist system will be comprehensively normalized, effectively preventing the spread of developers’ debt risks. The real estate financing coordination mechanism will achieve long-term operation. Monetary policy will continue to maintain relatively appropriate looseness. Through reserve requirement ratio and interest-rate cuts, smoothing the transmission mechanism, and strengthening financing guarantees and risk compensation, it will solve the issues of financial institutions being unable or unwilling to lend, thereby creating a stable financial environment for reasonable financing.

Institutional building will focus on implementing the new model and improving supporting systems, linking up with the top-level design of the “15th Five-Year Plan” (the 15th Five-Year Plan period). It will further deepen the housing provident fund system reform, and promote the construction of basic institutions and supporting policies for the new model of real estate development, shifting from “building a framework” to “filling in content and weaving supporting systems.” At the same time, housing security will be deeply linked with population policies, strengthening targeted housing support for newly married and newly child-bearing households and families with multiple children. This will help housing return to the attributes of a consumer product and activate both rigid and improved housing demand.

Fiscal and financial policies will maintain precise coordination and mechanism-based coverage. With 4.4 trillion yuan of local government special-purpose bond investment continuing to focus on people’s livelihood projects and the refinancing/replacement of hidden debt, funds will not be allowed to flow to commercialized development. This will ensure that fiscal resources precisely support people’s livelihood areas such as affordable housing and urban renewal. Along with the optimization of “three red lines” regulation, industry financing will accelerate its adaptation to the new model, forming a long-term support system with fiscal guidance, financial support, and shared risk-bearing.

Overall, central real estate policies in 2026 will use a system-based approach to coordinate stabilizing growth, preventing risks, and benefiting people’s livelihoods, promoting the industry’s shift from scale expansion to quality improvement. This will lay the groundwork for building a housing system with multiple sources of supply, multiple channels for guarantees, and a rent-and-buy coexistence model. Looking ahead to the next five years, the real estate industry will follow the “15th Five-Year Plan” to accelerate a new ecosystem characterized by “backstops for affordability, market regulation, and quality-driven development.” Developers will focus on product strength and service strength; housing leasing, urban renewal, and aging-friendly renovations will become new growth drivers.

06

Localities: Precisely implementing improving quality and efficiency, coordinating across dimensions to support a stable market transition

In 2026, local real estate policies will continue to closely match the central top-level deployments, moving away from fragmented easing and toward a governance model characterized by precise implementation, system-wide coordination, and long-term adaptation. They will focus on four core dimensions: upgrading product quality, providing targeted support to the demand side, improving housing security, and revitalizing stock land, and achieve stable market conditions in the short term and better optimization of structures in the long term:

On product quality improvements, localities will fully implement practical standards for “good homes,” shifting from top-level concepts to detailed rules. They will keep improving construction specifications for residential buildings that are safe, comfortable, green, and smart, and further define mandatory requirements such as building storey heights, intelligent security, and green building materials. At the same time, they will advance a dual-improvement project for both housing quality and property service quality. They will also integrate quality improvement into urban renewal and community construction, stepping up efforts to build innovation-oriented industrial communities and business communities, and deepening the linkage between housing quality and fine-grained urban governance—so the industry moves from “scale expansion” to “quality first.”

On demand-side support, optimized public housing funds and tax/fee subsidies will become core levers, with policies becoming more precise and more human-centered. Public housing fund policies will continue to lower the barrier to buying a home. Measures such as lowering down payments for second homes, increasing loan limits, promoting intergenerational assistance, and directly paying out rent for renting will be widely rolled out. Families with multiple children, talents, and homes in green building categories will be eligible for stacked benefits. Tax/fee subsidies will be targeted to support rigid demand and improved demand. Targeted subsidies such as for talent home purchases, multi-child families, and “trading in the old for the new” (old-to-new) will be implemented on a regular basis. Local policy-driven rollout will also include deed tax benefits, individual income tax refunds, and credit interest subsidies, precisely activating rigid and improved housing consumption.

On housing security, localities will balance people’s livelihood safety nets with investment certainty, building a dual protection system for stabilizing people’s livelihoods and stabilizing expectations. Acquiring stock commercial residential properties to support affordable rental housing, talent housing, and resettlement housing will become a mainstream model. Coverage of affordable housing will be continuously expanded, focusing on precise safety-net support for new urban residents, young people, newly married and newly child-bearing families, and families with multiple children. At the same time, supported by special-purpose bond funds, they will improve the full-process mechanisms for affordable housing construction, operation, and management. This will stabilize people’s livelihood project investment and housing supply, inject certainty into the market, and achieve a win-win between people’s livelihood protection and market stabilization.

On land supply and stock revitalization, localities will strictly implement the “stock first” orientation and further improve supply-and-demand expectations. They will strictly control incremental supply of residential land, intensify cleanup and disposal of idle land and inefficient land, and revitalize stock resources through methods such as special-purpose bond reserve-and-acquire programs, changes in land use properties, and phased development. The structure of land supply will tilt toward affordable housing, high-quality residential projects, and urban renewal projects. By tapping stock potential instead of expanding incremental supply, localities will stabilize long-term supply expectations and help land-market supply and demand move toward a new balance.

Part 2

Land Section

Scale continues to shrink while quality improves, and supply-side optimization advances in depth

In the first quarter of 2026, the national land market closely followed the core policy orientation of “controlling incremental supply, reducing inventories, and optimizing supply.” Overall, it showed an operating pattern of continuous shrinkage in scale, improvement in development quality and efficiency, and steady optimization on the supply side. In 300 cities nationwide, both the contracted floor area and the amount of commercial land transactions declined year-on-year by 16% and 35%, respectively. Under factors such as supply being based on demand and the delay of land supply around the Spring Festival, the market as a whole maintained a shrinkage trend until transaction momentum recovered somewhat after mid-March.

Market structure continued to optimize. The share of land parcels entering the market for urban renewal and old-city redevelopment increased in first- and second-tier cities. This reduced the floor price while promoting a shift of supply toward more intensive development. In key cities, premium land parcels such as Guangzhou’s Machang Phase I and Hangzhou’s Chengdong New City saw high heat and became highlights. The orderly progress in the buyback and revitalization of idle stock land accelerated. The reserve-and-acquire pace became even more prudent, and funds increasingly clustered in core cities. Developers’ investment remained cautious overall, and their land acquisition scale fell year-on-year as they focused on allocating to core premium land parcels. In the first quarter, the land market’s main storyline centered on “improving quality through reduced quantity,” and the implementation of supply-side reforms delivered results, laying a solid foundation for stable market operation throughout the year and for aligning supply and demand in the industry.

01

Land transactions continued to shrink in scale in the first quarter; premium parcels in Guangzhou, Hangzhou, and elsewhere saw high heat as expected

1) In 2026, the local land supply timetable continued to slow down, and the transaction scale continued to show a year-on-year decline. This was mainly affected by three factors: first, at the beginning of the year, localities adhered to land supply based on needs; land supply and new home transaction volumes both declined, driving a gradual decrease in the broader stock size. Second, since 2025, the policy effects of revitalizing stock land and increasing local fiscal support through special-purpose bonds have continued to become apparent. Third, in 2026 the Spring Festival occurred later, causing local land supply schedules to be delayed accordingly; land auction markets did not fully begin until March. As of March 25, in the first quarter, the contracted floor area of commercial land transactions in 300 cities nationwide was 97 million square meters, down 16% year-on-year; the transaction amount was 261 billion yuan, down 35% year-on-year. The decline in amount was significantly greater than the decline in area, mainly because in the same period of 2025, first- and second-tier cities completed a large volume of high-total-price and high-unit-price premium parcels, creating a higher base.

From the trend of monthly contracted floor area, in January and February the year-on-year declines were 24% and 19%, respectively; in March, the year-on-year figure rebounded by 30%. After the Spring Festival, land transaction momentum in various places accelerated noticeably. Based on overall quarterly performance, land transactions in the first quarter were still in a declining range. Under the overall policy guidance of “controlling incremental supply,” it is expected that the national land transfer scale this year will be maintained at a reasonable level slightly below new home transaction volume.

By city tier, in the first quarter, transaction volumes across cities of all tiers fell year-on-year. Second-tier cities saw the largest decline in contracted floor area, at 36%. First-tier cities had contracted floor area down 19% year-on-year and total transaction value down 40% year-on-year; however, premium parcels still had bright spots. Major parcels were offered in Shanghai and Guangzhou, with Guangzhou’s Machang parcel drawing particular market attention. After 243 rounds of bidding, the parcel was won by Yuexiu. The total transaction price was 23.6 billion yuan, the second-highest total price in Guangzhou land auction history—just behind the 25.5 billion yuan Guangzhou Asian Games City parcel that transacted in 2009. The premium rate was 26.6%, the nominal floor price was 42k yuan per square meter, and based on the sellable portion, the calculated floor price exceeded 60k yuan per square meter.

Second-tier cities’ contracted floor area declined 36% year-on-year, and total transaction value declined 56% year-on-year. Among the TOP10 cities by contracted floor area for second-tier cities in the first quarter, only Shijiazhuang, Xi’an, and Ningbo had contracted floor areas exceeding 1 million square meters. Hangzhou had 820k square meters, down 64% year-on-year, but bidding heat remained impressive. In March, the residential land in Chengdong New City was won by Poly Development for 3.2 billion yuan, with a premium rate as high as 51%. Contracted floor area in third- and fourth-tier cities declined 11% year-on-year, the smallest decline among all tiers, mainly benefiting from the relatively lower base of prior transactions.

2) As the share of parcels classified as urban renewal and old-city redevelopment increased, the average floor price in first- and second-tier cities declined significantly year-on-year.

3) In the first quarter, the average premium rate for land transactions across the country was 4.7%, up 2.1 percentage points from the fourth quarter of 2025.

02

Guangzhou leads by transaction amount; among the TOP10, Guangzhou and Hangzhou both average premium rates above 20%

In the first quarter of 2026, the list of the TOP20 cities by land transaction amount across the country showed a clear tiered structure. First-tier cities occupied the top three seats: Guangzhou ranked first with 25.6 billion yuan in transaction amount; Shanghai and Beijing ranked second and third, respectively, with both amounts exceeding 10 billion yuan. There were 10 second-tier cities included in the TOP20, and two Northeast cities—Shenyang and Harbin—also made the list. There were 7 third- and fourth-tier cities on the list, and most of them came from Jiangsu Province. Nantong was especially prominent: with 10.4 billion yuan in transaction amount, it surpassed Hangzhou and ranked fourth.

From Nantong’s land transaction structure, transactions in Chongchuan District and Tongzhou District at the city proper level totaled 2.22 billion yuan, accounting for 21% of the city’s total. The main force of land transactions concentrated in the county-level and county-level city areas. Nantong’s Rudong County relied on the Xiaoyangkou tourism and resort development plan and transferred multiple commercial and office parcels. In the first quarter, the total land transfer price was 4.35 billion yuan, accounting for 42% of the city’s total transaction amount.

Land market heat showed clear differentiation. In the first quarter, most cities’ transacted parcels were mainly urban renewal and old-city redevelopment types, with average premium rates generally below 5%. But the market heat in Guangzhou, Hangzhou, and Harbin was notably higher: their average premium rates were 24%, 30%, and 29%, respectively. Guangzhou’s high premium was mainly driven by the Machang parcel, which transacted at a total price of 23.6 billion yuan with a 26.7% premium rate. This substantially raised Guangzhou’s average premium rate for the first quarter and also realized Guangzhou’s “start with strategy and win at the outset” goal promoted by its planning and natural resources authority. In Hangzhou, three residential land parcels all achieved premium transactions; notably, the residential land in Chengdong New City sold with a premium rate of 51%. Harbin, meanwhile, saw premiums pushed up as it transferred multiple high-quality improvement-oriented residential plots within the urban districts, which were won by locally deep-rooted developers through premium bidding, raising the overall premium level.

Looking at overall transaction characteristics, parcels classified as urban renewal and old-city redevelopment still mainly transacted at the base price. Two old-redevelopment parcels on Guanqu Street in Fuzhou were located in a mature urban area. Influenced by the urban renewal cycle and the presence of many nearby projects under construction, they ultimately transacted at base prices of 1.99 billion yuan and 1.79 billion yuan, respectively. In core cities such as Shanghai’s Qinqpu town’s Jiangnan Chengxiang city-core improvement residential plot (44k yuan), Beijing’s Shougang old redevelopment parcel (13.9 billion yuan), Ningbo’s Yinzhou return-and-relocation housing plot (62.3k yuan), these premium urban renewal and old-redevelopment parcels also transacted at the base price.

03

Land acquisition amounts down by half year-on-year; premium core parcels remain must-win investment targets

In the first two months of 2026, due to the fact that local governments had not yet fully opened land supply and because of the Spring Festival holiday, most large-scale developers did not start investment plans. As a result, land acquisition values, amounts, and areas of typical enterprises all saw year-on-year declines.

Among the top 100 developers by incremental land reserve, the sum of their incremental value, total price, and total floor area were 205.9 billion yuan, 99.6 billion yuan, and 19.06 million square meters, respectively. Their value and amount declined by nearly half compared with the same period, and their area fell 29% compared with the same period. It is worth noting that although developers are currently in a “bottoming out” investment stage, premium land parcels in core cities remain must-win targets. Taking Guangzhou’s Machang parcel as an example, a total of eight developers participated in the bidding, including several major central and state-owned enterprises such as Yuexiu, Poly, China Overseas, China Resources, and China Merchants. Competition was intense. After more than a hundred rounds of bidding, five developers still continued to compete.

In terms of the threshold value for the top 100, it also fell substantially compared with the same period, reflecting developers’ caution in land acquisitions. For typical sample companies in the top 100 by incremental land reserve, the threshold value for incremental land reserves was 7.3 billion yuan, down 20% year-on-year. The threshold value for incremental total price among the top 100 was 59.9k yuan, down 10% year-on-year. The threshold value for incremental floor area among the top 100 was 1.12 million square meters, with a decline of 15%.

In addition, among the top 20 companies by sales value, only 6 companies acquired land. Most of them are large-scale central and state-owned enterprises, as well as private enterprises such as Longfor and Binjiang that have remained active in the land market in recent years. Among them, Yuexiu Properties’ land acquisition amount in the first two months was 26.2 billion yuan, up 338% year-on-year, while the land acquisition amounts of other companies were all under 2.5 billion yuan.

04

Practice “controlling incremental supply” to accelerate supply-demand balance; “optimizing supply” will bring more development certainty

In the first quarter of 2026, the national land market began with a mix of total shrinkage in volume and high heat in some areas. Land transaction scale continued to decline year-on-year, and the “controlling incremental supply” policy guidance from the central government was strictly implemented. In 300 cities nationwide, the contracted floor area and transaction value of commercial land both declined year-on-year by 16% and 35%, respectively, while the pace of inventory reduction in the industry advanced steadily. Meanwhile, in core cities such as Guangzhou’s Machang parcel and Hangzhou’s Chengdong New City residential land, premium land parcels experienced multiple rounds of intense bidding and achieved impressive premium transactions. This not only highlights the scarcity value of assets in core locations, but also fully demonstrates a positive interaction between the supply of premium land parcels and developers’ willingness to invest—injecting key vitality into the land market.

Based on the first-quarter market performance, it is expected that the land market in 2026 will show four key development characteristics. Differentiation among markets will become more pronounced and gradually develop in depth: first, transaction scale will continue to be controlled. The annual land transfer scale will be maintained slightly below the reasonable level of new home transactions. By continuing to push from the supply side, the industry will accelerate inventory reduction and gradually normalize supply-demand relations in the real estate market. It is expected that the contracted floor area of commercial land transactions in 300 cities nationwide will still show a small year-on-year decline throughout the year. Key cities will strictly control the timing of land transfers to avoid oversupply.

Second, supply structure will be continuously optimized. As revitalization of idle stock land and parcels for urban renewal and old-city redevelopment continue to enter the market, and with the Ministry of Natural Resources’ Document No. 38 emphasizing guidance to strengthen stock revitalization, land supply will further shift toward “prioritizing quality.” Core cities will increase the supply of high-quality residential plots, reduce the transfer of inefficient land, and push the market toward healthy and intensive development. At the same time, land supply for affordable housing will continue to be secured, helping improve the housing security system.

Third, bidding heat will gradually transmit. In the first quarter, high-heat parcels already appeared in Guangzhou and Hangzhou. In the following period, first-tier cities such as Shanghai and Beijing will successively release high-quality residential plots in core locations. Market heat will spread from point-like hotspots to more core cities and quality segments. In second-tier core cities, the heat for high-quality parcels is expected to further increase, while the heat in ordinary second-tier and third- and fourth-tier cities will not change significantly.

Fourth, the overall investment posture of developers will remain cautious. Currently, the market as a whole is still in a bottoming-out phase. The land market is unlikely to see a comprehensive rebound. The characteristic of heat concentrating in core areas will persist throughout the year.

From developers’ investment logic: on the one hand, lingering hovering around the market bottom continues to suppress confidence in land acquisition. The current foundation for a recovery in real estate sales is still not solid, and most developers’ cash flow pressures have not been fundamentally eased. Ensuring capital safety and safeguarding the process of clearing projects becomes the top consideration for investment, and developers’ land acquisition decisions overall become conservative. On the other hand, market heat is highly concentrated in core areas, making the “hot spots on points and quiet on the full surface” characteristic increasingly obvious. Land bidding hotspots will concentrate in first-tier cities’ core locations and quality segments in strong second-tier cities. Third- and fourth-tier cities and remote suburban areas will remain sluggish, further intensifying the pattern of investment differentiation.

In terms of market entity structure, central and state-owned enterprises and urban investment and development platforms will continue to dominate land acquisition. Central enterprises and high-quality local state-owned enterprises will continue to deepen their presence in first- and second-tier core cities due to advantages in financing costs. Urban investment platforms take on a backstopping role in third- and fourth-tier cities, stabilizing local land market order. A small number of financially robust private enterprises may opportunistically replenish their land reserves, but overall land acquisition capacity and scale are limited. The market entity structure will remain stable.

For developers, in 2026 investment should stick to the core strategy of prioritizing safety and pursuing precise layout. Focus on core cities’ core segments and reduce investment risks through cooperation and development models. At the same time, closely watch policy windows. While guarding the bottom line of capital safety, precisely capture structural investment opportunities.

Overall, the 2026 land market will operate steadily under the main line of “controlling incremental supply, reducing inventories, and optimizing supply.” With deeper revitalization of stock assets, the release of quality supply, and the continued emergence of policy effects, the market will see more development certainty. Stable and orderly operation of the land market will continuously help the real estate industry accelerate the construction of a new development model, promoting a transition toward high-quality and sustainable directions.

Part 3

City Section

In the first quarter, weak recovery and strong differentiation continued; in the second quarter, it will still be the stage of confirming the bottom and grinding through

In 2026, the first year of the “15th Five-Year Plan” period, real estate policy tone has upgraded from “promoting stabilization after a downturn” to “focusing on stabilizing the real estate market.” Policy emphasis shifts to routine stabilization of the market, reducing inventories, and optimizing supply, laying institutional groundwork for an upward market trend. On the market side, both volume and prices stabilize gradually, while structural differentiation intensifies. After nearly four years of deep adjustment, in the first quarter of 2026, China’s real estate market shows characteristics of an “L-shaped bottoming out with narrowing declines.” Gradual support at the bottom is forming, but the structural differentiation is still pronounced, with core cities leading. The overall market still faces pressure.

01

Overview: In the first quarter, weak recovery with an L-shaped bottom and narrowing declines continued; third- and fourth-tier cities saw declines narrow first

In the first quarter, under the dual influence of policy support and market recovery, the national real estate market showed an operating feature of “weak recovery and strong differentiation.” The overall market has gradually exited the period of deep adjustment, but recovery momentum is still insufficient.

First, there is a split between new-home and second-hand housing markets. Key indicators such as new-home sales and supply remain at low levels, with sharp declines on both a month-to-month and year-on-year basis, and home prices have not yet stopped falling. Inventory is rising and the digestion cycle is lengthening. In contrast, transaction activity in the second-hand housing market has improved, and signs of price stabilization have emerged. In some first- and second-tier cities, the year-on-year growth of second-hand home transaction volumes has already turned positive.

Second, third- and fourth-tier cities exhibit “data stabilization,” while first- and second-tier cities show leading differentiation in terms of volume and price declines. Some core first- and second-tier cities such as Shanghai, Beijing, and Hangzhou lead the recovery. Especially, second-hand housing transaction volumes have already exceeded the same period in 2023. But third- and fourth-tier cities’ transaction scales are basically bottomed out. Under the two logic systems for both the new-home market and the second-hand stock market, the new-home transaction scale appears relatively stable—showing smaller fluctuations, or a “low base effect” that results in volume and prices increasing.

02

New supply: New-home supply scale continues to downgrade; in first- and second-tier cities, month-on-month declines exceed 50%, constraining transaction performance

In the first quarter of 2026, the total newly added supply area of newly built commodity residential housing in China’s key 50 cities was 14.866 million square meters. Both month-on-month and year-on-year it fell sharply by 48% and 42%, respectively. The supply side contracted significantly.

First-tier cities’ combined supply area was 2.102 million square meters, down 57% month-on-month and 35% year-on-year. Overall, they were in a deep adjustment stage. Among them, Shenzhen’s supply area was 0.359 million square meters, with month-on-month and year-on-year declines of 73% and 39%, respectively—the largest drop among first-tier cities. This may relate to the pace of developers’ push to sell slowing down after market adjustments in the earlier period. Shanghai and Guangzhou also saw month-on-month declines exceeding 60%, while Beijing’s month-on-month decline was relatively mild at 14%, reflecting differentiation within first-tier cities. From the perspective of individual cities, except Beijing, the supply areas of Shanghai, Guangzhou, and Shenzhen were all down more than 30% compared with the same period last year, showing clear supply-side contraction pressure. Most second-tier cities saw supply decline, while a few cities grew against the trend.

Second-tier cities’ combined supply area was 8.456 million square meters, down 51% month-on-month and 48% year-on-year—overall slightly worse than first-tier cities. Chengdu had 1.278 million square meters of supply, the highest among second-tier cities, but down 50% month-on-month and 44% year-on-year, remaining in an adjustment channel. Cities such as Hangzhou, Xi’an, Wuhan, and Tianjin also had supply areas above 0.5 million square meters, but their month-on-month and year-on-year declines were generally between 30% and 60%.

Third- and fourth-tier cities’ combined supply area was 4.308 million square meters, down 32% month-on-month and 31% year-on-year. The decline was significantly smaller than in first-tier and second-tier cities, and supply-side contraction pressure was somewhat alleviated. Among them, Shantou’s supply area was 8B square meters, up sharply by 79% month-on-month and up slightly by 8% year-on-year. Zhaoqing’s supply area was 8B square meters, up 36% month-on-month and up sharply by 33% year-on-year. Yancheng’s supply area was 8B square meters, up sharply by 154% month-on-month and down slightly by 20% year-on-year, making it a bright spot among third- and fourth-tier cities.

03

New-home transactions: Both scale and month-on-month declines fell by 30%; first-tier declines lead while third- and fourth-tier cities’ transaction contraction pressure is first to ease

In the first quarter of 2026, the transaction side showed clear signs of improvement. From January 2023 to October 2025, new-home transaction area in key 50 cities fluctuated within the range of 10 to 15 million square meters, with an overall downward trend. In January 2026, transaction area dropped to a stage low of about 10 million square meters, and both month-on-month and year-on-year declined sharply. In March, transaction area continued to rise to 11 million square meters; month-on-month growth surged by 89%, and the year-on-year decline narrowed to 32%.

In the first quarter of 2026, new commodity residential housing transaction area in China’s key 50 cities totaled 26.387 million square meters, down 30% month-on-month and down 30% year-on-year. Overall, the market remained in an adjustment stage, but differentiation by city tier was significant; some cities had already released positive signals of transaction recovery.

First-tier cities’ combined transaction area was 3.454 million square meters, down 34% month-on-month and 35% year-on-year—showing clear pressure on the transaction side. Among them, Shanghai’s transaction area was 0.654 million square meters, with month-on-month and year-on-year declines of 43% and 53%, respectively—the largest decline among first-tier cities. Guangzhou’s month-on-month decline was also above 30%, while Shenzhen’s month-on-month decline was relatively mild at 23%, reflecting differentiation within first-tier cities. From the perspective of individual cities, except for Guangzhou, the transaction areas of Beijing, Shanghai, and Shenzhen were all down more than 30% compared with the same period last year, indicating significant contraction pressure on the transaction side.

Most second-tier cities’ transactions fell, while a few cities grew against the trend. Second-tier cities’ combined transaction area was 14.969 million square meters, down 33% month-on-month and 36% year-on-year—overall decline slightly larger than first-tier cities. Chengdu ranked first among second-tier cities with a transaction area of 1.756 million square meters, but down 24% month-on-month and 51% year-on-year, still in an adjustment channel. Cities such as Hangzhou and Xi’an and Wuhan also had transaction areas above 0.5 million square meters, but their month-on-month and year-on-year declines were generally between 20% and 50%. Only Nanning grew year-on-year by 11%.

Third- and fourth-tier cities saw easing contraction pressure on the transaction side, with some cities performing well. Third- and fourth-tier cities’ combined transaction area was 7.964 million square meters, down 22% month-on-month and 14% year-on-year; the decline was significantly smaller than in first-tier and second-tier cities, and contraction pressure on the transaction side was somewhat alleviated. Among them, Huainan’s transaction area was 44k square meters, up sharply by 257% month-on-month and up sharply by 47% year-on-year. Nantong’s transaction area was 8B square meters, up 33% month-on-month and up 67% year-on-year. Yancheng’s transaction area was 0.189 million square meters, up 12% year-on-year, making it a highlight among third- and fourth-tier cities. In addition, some cities saw transaction areas both up and down to different degrees year-on-year and month-on-month, such as Shaoxing down 12% month-on-month but flat year-on-year; Dongying down slightly by 3% month-on-month but up by 8% year-on-year, showing that differentiation in third- and fourth-tier city markets is also evident.

04

New-home prices: the downward trend slows; the number of cities where month-on-month declines stop hits a new high

In February 2026, overall, among 70 large and medium-sized cities, the month-on-month decline in the sales prices of commodity residential homes continued to narrow, and prices fell year-on-year as well. The number of cities where new-home prices stopped falling month-on-month increased to 17, the highest since the second half of 2025.

In February, the sales price of commodity housing in 70 large and medium-sized cities fell month-on-month by 0.3%. In first-tier cities, the month-on-month change in the sales price of newly built commodity residential homes shifted from a decline of 0.3% the previous month to being flat. Beijing and Shanghai both rose by 0.2%, Guangzhou was flat, and Shenzhen fell by 0.3%. In second- and third-tier cities, the month-on-month changes were declines of 0.2% and 0.3%, respectively; the decline narrowed by 0.1 percentage point for both. Among the 70 large and medium-sized cities, 10 cities saw the sales price of newly built commodity residential homes rise month-on-month, and 7 cities were flat, for a combined increase of 9 cities compared with the previous month. Among them, cities such as Beijing, Shanghai, Nanjing, and Hangzhou all saw month-on-month growth of not less than 0.2%.

Using January 2021 as the base point, for the housing price index of newly built commodity residential homes across 70 cities, new-home prices were down 10.7% compared with the start of 2021, while second-hand home prices were down 22.14% compared with the start of 2021. Data released by the National Bureau of Statistics show that year-on-year, the price index for first-hand homes declined by 3.5%. Among them, in first-tier cities, the sales price of newly built commodity residential homes declined by 2.2% year-on-year, with the decline widening by 0.1 percentage point compared with the previous month. Shanghai rose by 4.2%, while Beijing, Guangzhou, and Shenzhen declined by 2.3%, 5.1%, and 5.5%, respectively. In second- and third-tier cities, sales prices of newly built commodity residential homes fell by 3.1% and 4.0% year-on-year respectively, with the decline widening by 0.2 and 0.1 percentage points, respectively.

From January 2023 to February 2026, the transaction average price of newly built commodity residential homes across China’s “hundred cities” fluctuated within the 19,000–22,000 yuan per square meter range. Overall, the trend remained relatively stable, showing price resilience. The market overall followed a path of “spike up then fall back, then oscillate at low levels, and gradually stabilize and rise again.”

First-tier cities saw relatively smooth price fluctuations with strong resilience. In the first half of 2023, the average price quickly rose to a stage high of 65,000 yuan per square meter. After that, due to market adjustments, the second half of 2023 through the first half of 2024 saw a clear decline, with the lowest point reaching 50,000 yuan per square meter. Since the second half of 2024, the average price has remained in a narrow range of 55,000–60,000 yuan per square meter, with significantly reduced fluctuation range. In February 2026, the average price was around 54,669 yuan per square meter, down about 15% from the 2023 peak, showing that after earlier adjustments, the price system has been gradually stabilizing.

Second-tier cities experienced more noticeable price fluctuations. The transaction average prices hovered around 17,000–19,000 yuan per square meter, with larger fluctuation magnitude than first-tier cities. But since the second half of 2025, the decline has narrowed somewhat, and the overall rebound momentum is clear. The average price in the first quarter of 2026 rose by 7.4% compared with the third quarter of last year.

Third- and fourth-tier cities’ transaction average prices overall kept declining. They gradually fell from around 14,000 yuan per square meter to about 12,000 yuan per square meter in February 2026, with a cumulative decline of about 19%.

In the first quarter of 2026, based on the ranking of transaction average prices, Shanghai led with 75,908 yuan per square meter, but both month-on-month and year-on-year it declined by 6% and 3%, respectively, indicating a slight pullback in price. Shenzhen’s transaction average price was 68,401 yuan per square meter; it was flat month-on-month and up 14% year-on-year, reflecting stronger price resilience. Beijing’s transaction average price was 55,223 yuan per square meter; it decreased slightly by 5% month-on-month and 1% year-on-year, showing a relatively stable price trend. Cities such as Hangzhou, Xiamen, and Dongguan also had transaction average prices above 30,000 yuan per square meter. Among them, Xiamen’s transaction average price rose sharply by 24% month-on-month and by 11% year-on-year. This is more a structural increase in transaction average prices driven by a higher share of premium housing transactions under relatively low total volume. Hangzhou shows a similar pattern. Looking at the ranking by month-on-month changes in transaction average prices, early signs of price repair emerged for many third- and fourth-tier cities and for deeply adjusted second-tier cities such as Zhengzhou and Changsha. Looking at rankings by year-on-year changes, second-tier cities such as Nanjing, Chengdu, Xi’an, Nanning, Shenyang, and Dalian saw larger declines. Compared with cities like Yangzhou and Yancheng and Yantai and Lishui in the third- and fourth-tier, where pressures have remained high and price adjustments persist, their year-on-year declines were leading, indicating that market adjustment pressure remains large.

05

New-home inventory and absorption cycle: at the end of the first quarter, the stock of unsold homes measured via permits declines, and the absorption cycle rises to 26 months

Looking at total area of unsold housing nationwide, it showed a continued stage-level rising pattern. By the end of February 2026, it reached a stage peak of 8B square meters. This is mainly because the “whitelist” mechanism brought peaks in pre-sale-to-completion milestones, which increased the supply of completed units. However, market demand-side heat returned less than expected, driving further increases in the area of unsold listings. In 2026, the area of unsold listings may remain at a relatively high level. But in the long run, as market demand continues to be released and after the peak of “delivery assurance” passes, new supply of completed but unsold homes will slow down significantly. The area of unsold listings will be gradually digested and will not see a large increase.

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