China real estate market shifts toward secondary home sales

China’s real estate market is undergoing a structural shift toward the secondary housing market. According to data from the Ministry of Housing and Urban-Rural Development, existing home transactions accounted for 52% of all market activity during the first eight months of 2026. This represents a significant increase from 27% in 2020.

While new commodity housing sales floor area declined by 12.1% year-on-year in early 2026, existing-home network-signed transaction areas grew by 10.6%. This divergence indicates that consumer demand is shifting from new construction toward replacement and upgrading, where homeowners sell older properties to acquire better quality or larger living spaces.

The market transition follows a period of volatility between 2024 and 2025, during which the sector absorbed a developer debt crisis. While tier-1 cities like Shanghai and Shenzhen have shown stabilizing transaction volumes, lower-tier cities continue to manage excess inventory. The government has supported this transition through mortgage rate reductions, purchase restriction cuts, and buyer subsidy programs in over 300 cities.