China's real estate market transitions into new era

Editor's note: Zhu Fangfei is deputy director at the Institute for Public Policy of Zhejiang Province and director at the Research Department of the Institute for Public Policy of Zhejiang University.

The article reflects the author's opinions and not necessarily the views of CGTN.

As China's real estate market pivots from new development to the operation of existing properties, the country is entering an era defined by its housing stock.

The old growth model, powered by the continuous expansion of newly built commercial housing, is giving way to a new phase focused on revitalizing existing homes, improving quality, and strengthening long-term management.

At a press conference held by the State Council Information Office on September 18 this year, the Ministry of Housing and Urban-Rural Development cited data from the National Bureau of Statistics showing that second-hand home transactions accounted for 27% of housing transactions in China in 2020; the figure rose to 46% in 2025 and climbed further to 52% in the first eight months of 2026.

This marks a landmark transition in China's real estate market and reflects a profound shift in the sector's underlying development model.

Over the past two decades or so, China's real estate sector followed a typical growth model driven by new development, with its core task centered on addressing the issue of ensuring adequate housing supply.

During the period of rapid urbanization, people flocked to cities, creating an acute housing shortage.

At that time, when making home-buying decisions, residents often weighed the long-term benefits of location and urban planning as well as the promise of property appreciation in new districts far more heavily than the actual quality of the properties.

Housing was viewed primarily as a commodity bought and sold in a one-off transaction, while maintenance, renovation, and long-term management following construction and handover often took a back seat.

As urbanization has slowed, China’s permanent resident urbanization rate rose from 17.9% in 1978 to 67.89% in 2025.

Urban per capita housing floor area has surpassed 40 square meters.

The era of an overall shortage of housing has therefore largely come to an end.

Second-hand homes now account for more than half of all housing transactions, which indicates that the market no longer relies primarily on new housing supply to meet residential demand.