First-tier real estate market, the turning point has arrived

Ask AI · Can the spring uptick in home sales under policy tailwinds keep running through Q2?

Interface News reporter | Wang Tingting

Interface News editor | Li Shen

This spring, the Shanghai market and other China’s first-tier cities’ housing markets have finally grown lively again after a long absence. Shanghai leads the way, hoisting the banner for a rebound in the real-estate market, with both the primary and secondary markets boiling at the same time.

The heat in the new-home market is most directly visible. A sales representative at a sales office said: “In the past, when we told clients, ‘This apartment will be sold quickly,’ they didn’t believe it at all and just assumed it was a routine sales pitch. Now, clients watch their preferred units get locked in on the spot by others right in front of their eyes—instantly panicking that if they hesitate even a moment, the home they want will be gone.”

The performance in the secondary-housing market has also exceeded expectations. A real-estate agent in Shanghai said: “Every day, there are sales champions being crowned in our stores. Seasoned agents, leveraging their accumulated pool of long-time customers, keep closing deals one after another. Even newcomers can quickly open accounts thanks to this wave of momentum.”

The enthusiasm in Shanghai’s housing market is spreading like a prairie fire. From morning to night, meeting rooms in agency branches are packed to capacity. The online contract-signing system has crashed multiple times, and sales offices for new developments are seeing even more explosive demand: consultative customers crowd around the model sand tables, foot traffic outside show flats keeps flowing, and real-estate advisors are so busy their voices turn hoarse.

Poly · Do Hui Hexi sales office. Filmed by Interface News

At 5:00 p.m. on March 14, Li Wei, the marketing head of Poly · Do Hui Hexi, had just sent off a group of concentrated home-viewing customers when she received a sprint directive: the day’s sales target was raised from 11 units to 15. Although the project site had already completed the originally planned target, they hadn’t even finished packing up when they launched the next round of sprint. Just after 9:00 p.m., Li Wei’s team had already achieved the 15-unit sprint target early.

For this outer-ring-outside project located in Shanghai’s southern science-and-technology innovation center area and just retracted a 99.5% discount, early-morning deal closings are no longer unusual. The marketing head told Interface News, “These days, our team basically gets off work after midnight. Last night, there were two groups of customers—only after settling on the units around 11 p.m. did they transfer and lock them in.”

Jiayuan · Yunhu Yue, located in the northern end of Shanghai, is also showing strong performance in this round of warming. Since March 13, when the exhibition center and model units were officially opened to the public, the project has been surrounded by home-viewing crowds. On the first weekend alone, over 500 groups visited; the following weekend it still remained at a high level with more than 350 groups visiting. On-site negotiations and inquiries continue to interweave, with demand for both first-time and improved housing being released in concentrated bursts.

Jiayuan · Yunhu Yue exhibition center. Filmed by Interface News

“We live nearby. We’re planning to upgrade to a more suitable place for our child’s schooling.” Inside the model unit at Jiayuan · Yunhu Yue, an intended buyer told an Interface News reporter. The busy on-site scenario with the whole family pitching in has made the sales office abuzz.

Real-estate developers are seizing the golden window for peak demand, ramping up volume and accelerating inventory turnover. Zhonghuan · Lu Island in the Baoshan Southern District area moved first. Its second-batch inventory quickly started reservations, becoming the first new development in Shanghai in March to reach a reservation ratio of 1:1. The project instantly ignited the market upon entering the market.

Interface News’ on-the-ground visit found that even after reservations ended, many homebuyers continued to go to the sales office to take part in smaller pre-registration activities. On March 18, Zhonghuan · Lu Island opened and cleared out immediately. According to the sales manager, unit selection officially began at 10:30 a.m. that day, taking only 90 minutes. All 79 units sold out, achieving a rapid “sell-out under daylight.”

Zhonghuan · Lu Island opening scene.

Breaking from the previous pattern where the luxury market had been the sole standout, Shanghai’s outer-ring-outside projects are also seeing a surge in homebuying interest. Just this past weekend, the third phase of Jiading Nanxiang Shidai · Yunjing, two days of cumulative reservations reached 101 groups, setting a standout result as the first new development on the 2026 outer-ring segment to break 100 reservations.

“The real demand of the first-time-buyer group is the core driving force that pulls the market.” Li Yujia from the Guangdong Provincial Center for Housing Policy Research said. The highlights of this round of new-home transactions are concentrated in two categories of projects: one is high-quality projects in central areas with both excellent quality and location; the other is projects near the suburbs with well-developed supporting facilities, prices that are more approachable, and standout advantages in school districts and transportation.

Many industry insiders believe this round of Shanghai’s housing-market行情 shows a “V-shaped” reversal. Market confidence has fully returned, and homebuying enthusiasm has far exceeded expectations. Some also predict the market will keep differentiating further, ultimately forming a “K-shaped” pattern.

Song Hongwei, executive vice president of the Centaline Research Institute, told Interface News that structural differentiation will be a long-term feature of housing-market development in this round. Song Hongwei predicts that in 2026, China’s housing market will follow a “K-shaped” path. In the core regions, good homes that meet the new regulatory requirements will see both prices and volumes rise together. In non-core regions, transactions will still rely on price-for-volume strategies. This differentiation will also make industry development more rational.

Shanghai is the city with the highest level of “certainty” in the national housing market. Beyond strong sales of new homes, secondary-market online contract-signing data has also been setting record after record. In mid-March, Shanghai’s weekly secondary-home transaction volume surpassed 7,200 units, setting a weekly high in nearly five years. The daily online contract-signing peak is approaching 1,500 units. Even high-frequency concentrated trading has caused the online contract-signing system to become congested and lag multiple times.

Screenshot of abnormal login for Shanghai secondary-home online contract-signing system.

As of March 22, Shanghai’s secondary-home transaction volume had surged to 21,443 units. As for the full-month sprint toward the 30k-unit mark, there is basically no suspense. This figure dramatically refreshes the record for the same period in prior years.

Real-estate agents are fighting back-to-back. Some take prospective buyers out for viewings and run through every community. Others sit down at the shop to negotiate and coordinate with landlord-side clients. “In the past, deal negotiations could take hours. Now, in just 2–3 hours, we can settle and lock in the deal. Transaction efficiency has doubled.”

“Whenever high value-for-money listings hit the market, they get sold right away. Quite a few quality units attract multiple groups of clients competing for them.” said the manager of Wanrong Road Pacific Real Estate in Jing’an District to Interface News. Currently, transactions are concentrated in small units with total prices ranging from 3 million to 7 million. “I just closed a deal last night. The buyer had been looking with me for over a year. They’d been watching and waiting before. Now that they feel the market heat, they made their move immediately.”

Ding Zuyu, chairman of the board of directors of Centaline Group, pointed out that the confirmation of the policy bottom has brought back expectations and confidence, and it is gradually transforming into actual transactions. For secondary housing, first comes the demand for first-time buyers and for “just-improved” homes: smaller units and lower total prices remain the mainstay.

Data source: Shanghai Online Real Estate. Charting by Interface News

On prices: as the market overall trend has moved upward, Shanghai secondary-home prices have ended nearly 10 months of continuous declines and turned positive on a month-over-month basis. Sellers’ reluctance to sell has intensified, shrinking their pricing negotiation room from last year’s 10%–15% to within 5%.

“Back then, landlords were desperate to sell, and buyers had a lot of room to bargain. Now the market has flipped. Owners’ psychological price expectations have clearly risen. As long as the price is acceptable, they won’t give in.”

A senior real-estate agent deeply involved in Shanghai’s housing market told Interface News about a deal she recently closed: the landlord listed the unit at 4.30 million yuan. The buyer initially offered 4.15 million yuan. If it were last year, the deal could basically have been completed. But this year, the landlord never agreed to lower the price. In the end, the buyer proactively raised the offer by 30k yuan to make the transaction happen.

The driver behind this wave of heat is the new policy package for housing in Shanghai—“Seven Rules of Shanghai.” “The momentum driven by policy has enabled core-city housing markets to first step out of a phase of stabilization and into a stage of improving fundamentals.” Tang Hua, head of the Residential Sales Department for First American Davis China, said.

The Shanghai housing-market new policies that took effect on February 25 cleared two major obstacles: eligibility to buy and access to funds, strongly driving a turning point in market conditions. For non-Shanghai residents, the social insurance requirement for buying property within the outer ring went from 3 years to 1 year. Holding a residence permit for 5 years makes it possible to buy directly without social insurance. This has brought a large volume of real, practical demand to the market, and it has also helped many “new Shanghainese” realize their dream of settling down.

The provident fund loan limits were also increased. For first-home households, the maximum amount that can be borrowed is up to 2.4 million yuan. For families with multiple children, when combined with green-building requirements, the figure can reach 3.24 million yuan. This will genuinely reduce the funding burden and monthly repayment pressure on homebuyers.

Wang Sheng from Shanghai Changzheng Hospital is one of the direct beneficiaries of the new policies. He has lived in Shanghai for more than a decade and had long planned an upgrade and improvement relocation, but it had never been implemented. After the new policies took effect, the higher provident fund loan额度 covered most of the home price. The interest per month was several thousand yuan less than a pure commercial mortgage. His burden was greatly reduced, and he moved in on the spot.

Homebuyers visit a model unit. Filmed by Interface News

Song Hongwei told Interface News that the real turning point in this round of the housing market should have the following features: first, risk clearance; second, a clear rise in transaction volume that drives price stabilization; and third, the repair of the entire real-estate chain—from land acquisition and new construction to marketing—so that it forms a virtuous cycle.

“Based on the current situation, first-tier city housing markets indeed show signs of bottoming out.” Song Hongwei said. The release of first-time-buyer demand during the traditional peak season in March is the core support. The key is that the Two Sessions set the tone for stabilizing the housing market, with the “Seven Rules of Shanghai” leading the policy push. When “good-home” policies land, they bring high value-for-money listings, giving buyers real benefits. These three forces together allow market confidence to continue to radiate from Shanghai to other first-tier cities.

At least in Shanghai, the arrow of simultaneous decline in both volume and prices in the housing market has already reversed. Tang Hua told Interface News that the current phase is a structural stabilization with core cities taking the lead. Whether a full reversal can be established depends on whether transaction volume can hold steady in Q2, whether secondary-housing inventory turnover is smooth, and whether residents’ confidence can continue to recover.

The “barometer” effect of Shanghai’s housing market is spreading to other first-tier cities.

The sales manager of Zhonghuan · Lu Island told Interface News, “Shanghai, as the vanguard of the national housing market, has set the direction for other cities. Beijing, Shenzhen, and Guangzhou have taken the ‘confidence pill.’”

In Beijing, as of March 18, online contract-signing for second-hand residences had reached 9,783 units, up 20.33% compared with the total transactions for all of February. For new homes, online contract-signing was 1,387 units, up 13.97% month-over-month. China Overseas’ Anlan Beijing won the top spot on the first-week transaction amount list with 326 million yuan. The main Poly project saw weekly transaction amounts exceeding 500 million yuan. Zhaoshang Chaotang Lvyue sold 35 units in a week.

In Shenzhen, multiple projects’ transaction posters are rotating and filling screens. For some projects, deals were completed at a rate of 41 units within two days. Secondary home transactions have been rising steadily. According to data from the Shenzhen Beike Research Institute, from March 2 to 8, the number of second-hand home signings on cooperating platform stores surged 118% month-over-month. On March 8, the single-day signing volume hit a peak in nearly one year.

In Guangzhou, as of March 20, the city’s secondary home transactions had skyrocketed to 7,471 units. At this pace, the full month has the potential to break 13k units, up 275% month-over-month. The new-home market is also in full swing. One project sold 27 units in a single month at an extreme pace; transaction volume jumped 900%, with deal volumes continuing to break upward.

Transaction performance poster for Shenzhen property listings.

However, to assess how long this housing-market rebound can last, we still need to observe the effectiveness of policy implementation.

“April and May will be the key window for verifying the real quality of this ‘small-spring’ surge.” Ding Zuyu said. Judging from current homeowners’ expectations, the referenced average listing prices for second-hand homes in Beijing, Shanghai, Guangzhou, and Shenzhen are still trending downward. This means the trend of owners’ lowered expectations has not fully improved.

To maintain the current market heat, Li Yujia believes, we still need to further optimize consumer-support policies such as provident fund and secondary-home deed transfer with mortgage “carried forward” (带押过户). Also, we should keep the secondary-home replacement chain open. At the same time, stabilize market pricing expectations, reduce irrational price cuts, and in hot-spot areas, fill in supporting facilities to continuously boost homebuying demand.

“Price-for-volume will be the foundation and premise for the secondary-market transaction rebound for a period of time. The game of ‘price down—volume up—price stable—volume down’ will still remain. In the short term, there is still no substantial real reversal in volume and price. Volume rising with prices stabilizing will become the normal pattern.” Ding Zuyu said.

Tang Hua also believes that in 2026, real-estate companies will focus on competing based on cash flow and product strength, accelerating the concentration of resources toward first- and second-tier cities, improving industry concentration, and fully shifting toward “produce based on sales, focus on the core, and build good homes.”

Data source: Iceberg Index. Charting by Interface News

The stabilization and rebound of first-tier-city housing markets is not only important for the healthy development of the real-estate industry, but also has significant implications for the macroeconomy.

A rebound in the housing market will directly activate upstream and downstream industry chains, driving the recovery of sectors such as building materials, home furnishings, and home appliances. This provides solid confidence for the overall economic recovery. And this rebound path—demand for first-time buyers driving the market, policy precision in deployment, and a replacement cycle that activates inventory—also offers practical reference samples for other cities nationwide, further helping to stabilize the broader macroeconomic picture.

Shanghai’s warm spring in the housing market is already here, and the rebound momentum in first-tier cities has been set. The real-estate industry is moving beyond confusion and waiting-and-seeing. Under the rhythm of the return to residential value, it is heading toward a more rational, healthier, and more sustainable new future.

(At the request of the interviewee, Li Wei and Wang Sheng in the article are pseudonyms.)