China reforms housing sales system to prioritize completed units

China has issued new guidelines to reform its residential property market, shifting the sales model from the long-standing pre-sale of unfinished units toward the sale of completed housing. This move aims to stabilize the crisis-hit property sector, reduce delivery risks, and protect the rights of homebuyers.

The previous system, which allowed developers to use buyer funds to finance construction, became a major source of instability following a market crash in 2021. The collapse of major developers, such as China Evergrande Group, left many projects stalled and buyers facing significant risks. To address the backlog, a whitelist financing mechanism exceeding 7 trillion yuan has been utilized to ensure stalled projects reach completion.

Under the new guidelines, local governments are encouraged to prioritize the sale of completed homes. For projects to qualify for pre-sales under the reformed system, individual buildings must generally be topped out. The Ministry of Housing and Urban-Rural Development has emphasized that while reforms should be strictly supervised, they should be tailored to local conditions rather than following a one-size-fits-all mandate.