Q1 real estate market inventory transactions performed well, with some cities experiencing a strong "mini spring" market.

Real estate developers believe the market adjustment has reached the “bottom range,” and the industry’s most difficult period has basically passed.

In the first quarter of 2026, what is the true temperature of the housing market?

Recently, multiple research institutions released first-quarter housing market data, showing that the new home market has the characteristics of “declining supply and demand, but a rebound in March.” Developers’ sales performance overall is not as strong as in previous years. The secondhand housing market, however, is more stable: the decline in transaction prices has narrowed, and the overall number of listings has fallen. In key cities such as Beijing and Shanghai, a “small spring”行情 has appeared.

With sales on the front line, many real estate firms have recently assessed the outlook for the property sector, and they generally believe that 2026 will be the key year for the industry to stop falling and recover. At present, the market adjustment has reached the “bottom range,” and the industry’s most difficult period has basically passed. The sector has officially entered a cycle of bottoming out and rebounding, along with deep differentiation. Core cities and high-quality segments are expected to repair first.

Top-100 real estate companies sell 14.87M yuan

In the first quarter of 2026, the new home market drew a sales curve characterized by overall shrinkage and a rebound in March.

A report from Centaline (China) Real Estate Research shows that in Q1 2026, in the country’s top 50 key cities, the newly added supply area of newly built commodity residential properties totaled 26.39M square meters, with both month-over-month and year-over-year drops of 48% and 42% respectively. The supply-side contraction is clearly evident.

With a sharp reduction in new home supply, transaction volumes have also declined compared with previous years. In Q1 2026, in the country’s top 50 key cities, the total transaction area of newly built commodity residential properties was 12k square meters, down 30% month-over-month and 30% year-over-year, respectively.

But if you look only at March, developers’ sales still saw a wave of a “minor peak.” Centaline (China) said that in March 2026, in the top 50 key cities, the transaction area of new homes was about 11 million square meters, up 89% month-over-month, while the year-over-year decline was 32%.

Judging by developers’ sales performance, in March 2026, typical top-100 real estate developers’ month sales attributable equity amount was 206.52 billion yuan, up 127.1% month-over-month. Some companies saw a sharp rebound in performance. Among typical developers, there were 7 companies with cumulative performance year-over-year increases greater than 100%, including 1 state-owned enterprise under the central government, 1 state-owned enterprise, and 5 private developers.

“Developers collectively rushed to hit targets in March. Compared with the relatively cool February, overall performance rebounded noticeably month-over-month. Although it’s not as good as the usual ‘golden March’行情 of the past, it has indeed produced solid, real performance gains.” Yihang Think Tank also said.

Regarding overall first-quarter sales by developers, data from the China Index Academy shows that from January to March 2026, the total sales value of top-100 developers was 620.87 billion yuan, with the year-over-year decline narrowing by 3.7 percentage points compared with January–February. As of the end of March, there were 16 housing companies with sales of 17k yuan (or more), down 1 from the same period; there were 28 companies with 10k yuan, down 10 from the same period.

Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, said that in the first quarter, the sales performance of top-100 developers was indeed relatively low. After developers completed last year’s sales push, the performance of new homes in January and February was relatively weak. In addition, last year there were many “good home” projects that absorbed part of the improved-demand. As a result, developers’ overall launch enthusiasm declined in the first quarter.

At present, the overall new home market in China is still in a “destocking” phase, and the problem of absorbing existing inventory cannot be ignored.

The China Index Academy said that as of the end of February 2026, the sellable area of commodity housing in 50 representative cities was 305 million square meters, basically flat compared with the end of 2025, and down 3.7% year-over-year. Slower sales have led to a longer clearing cycle. Based on the average monthly sales area over the last 12 months, by the end of February, the inventory clearing cycle in the 50 cities was 24.0 months, extending by 0.8 months compared with the end of 2025 and by 4.2 months year-over-year.

Secondhand housing “small spring”行情 is impressive

Different from the spotty rebound in the new home market, the secondhand housing market has truly seen a solid “small spring”行情.

First, let’s look at a set of overall transaction data. According to a Centaline report, in March, the transaction area of secondhand homes in the top 20 key cities was about 17.97 million square meters, up 117% month-over-month and up 6% year-over-year. Cumulatively in the first quarter, the transaction area was about 41.08 million square meters, up 4% year-over-year.

This means that in March, the transaction area of secondhand homes in the top 20 key cities “doubled,” and cumulative transactions in the first quarter were also higher than in previous years. In this “small spring”行情, first-tier cities such as Beijing and Shanghai played the role of “the vanguard.”

According to statistics from the Beijing Municipal Commission of Housing and Urban-Rural Development based on online contract filing (net signing) data, in March 2026, Beijing’s secondhand residential transactions were 19,866 units, up 3.4% year-over-year. The transaction volume hit a new high in nearly 15 months. On March 31, the number of daily online contract filings (net signings) for secondhand residences reached 1,422 units, setting the highest daily level in the past three years since April 2023, and the market’s recovery is evident.

What does it mean to have 19,866 secondhand home transactions? Generally speaking, Beijing’s monthly secondhand housing transactions are between 12k and 17k units, which is considered “neither hot nor cold.” When the monthly transaction volume is below 10k units, the market is relatively “cold.” If it is above this range—especially when monthly transactions exceed 20k units—the market is considered relatively “hot.”

It’s worth noting that the concentrated entry of first-time homebuyers (for “real demand”) is an important support for the current “small spring”行情 in first-tier cities. Data from I Love My Home Research Institute shows that in March 2026, in Beijing, secondhand home transactions priced below 3 million yuan accounted for 66.3% of total secondhand home transactions in the same period, up 19.1% year-over-year. Lower total-price listings became the main driver of transactions.

“Continuous declines in earlier home prices pushed a large number of listings into the price range that first-time buyers can afford. Combined with an improvement in market expectations, the previously accumulated wait-and-see demand was released in a concentrated way.” I Love My Home Research Institute said.

The research institute believes that after several years of deep adjustments, under the central government’s deployment to “focus on stabilizing the real estate market,” the market has started to move into a new stage. As a first-tier city, Beijing has solid city fundamentals; rigid housing demand and upgrade/improvement demand have persisted for the long term. Moreover, there is still room for optimization in subsequent real estate policies, so the “stop falling and recover”行情 is expected to continue.

More importantly, this round of secondhand housing recovery is not only increasing in volume; price declines have also narrowed.

The China Index Academy said that in March 2026, the average price of secondhand homes across 100 cities was 12,792 yuan per square meter. It fell 0.34% month-over-month, but the decline narrowed by 0.2 percentage points versus the previous month; it has narrowed for the third consecutive month. The year-over-year figure was down 8.55%.

Li Yujia said that the reduction in new listings of secondhand homes in hot cities has a positive impact on stabilizing the prices of available listings. At the same time, in recent years, transactions of smaller units with lower total prices have remained strong. A large volume of such smaller-unit listings has been consumed, leading to fewer low-priced listings. Owners’ willingness to cut prices is also declining, so bargaining room has generally begun to narrow. All of these lead to a narrower decline in home prices.

How do the management teams of developers view the outlook?

With new homes differentiating in the first quarter and a “small spring” in secondhand homes, how will the housing market move afterward? At recently held annual performance conferences that were densely scheduled, many developers assessed the industry trend. From the mainstream view, companies generally believe that after years of deep adjustment, the housing market has reached the “bottom range,” and the outlook is for stabilization and recovery.

The management of Longfor Group (00960.HK) said that the adjustment magnitude in the real estate industry is already quite large. In addition, with policy-level benefits for stabilizing the real estate market being continuously released, the market’s overall decline this year is expected to narrow significantly and realize “stop falling and recover.” In Q1 this year, transaction volumes of secondhand homes in hot cities have already shown a rebound. The warm-up in secondhand home transactions will gradually transmit to new-home replacement demand.

China Resources Land (01109.HK) expressed a similar view. Management said that in March this year, the national market showed characteristics of structural repair: new home transaction volumes increased month-over-month but declined year-over-year, and secondhand home transaction volumes showed a relatively large month-over-month increase. “The industry’s most difficult period has basically passed, and we have officially entered a cycle of bottoming out and recovery, along with deep differentiation. Core cities and high-quality segments are starting first. Based on gradually absorbing existing inventory, other cities will achieve slow repair.”

The management of Greentown China (03900.HK) said that the industry overall has entered the era of destocking. If policies to stabilize the market continue to be effectively implemented, with supply-demand relationships achieving further balance, it is expected that in the second half of 2026, core cities will have the potential to directly stabilize and recover. Specifically, in 2026, the sales of commercial housing are expected to accelerate toward stabilization. The expected full-year decline in transaction scale will further narrow, and destocking remains the top priority at this stage.

China Jinmao (00817.HK) management believes that the market has already adjusted to the “bottom range.” In first-tier cities, secondhand home prices have generally fallen to the cost space of main transactions, and the willingness for low-price fire sales has decreased significantly. At the same time, first-tier and second-tier core cities still have strong underlying demand, but because the market is still in a downtrend, many investors have not found a good time to enter. As the market gradually stops falling and stabilizes, demand remains very strong.

Centaline (China) summarized that in March 2026, the two sessions’ “Government Work Report” clearly stated that efforts would focus on stabilizing the real estate market and that it would be included in the “15th Five-Year Plan” work direction. At present, the real estate market is still in a large cycle of supply-side adjustment. In Q2 2026, it will be a key observation period for China’s real estate market to confirm the bottom and see structural differentiation. The overall market is in a grinding stage transitioning from “stop falling” to “recover.” The rule of “volume leading price” still applies.

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Responsible editor: Liu Wanli SF014