According to a recent analysis by a leading real estate research institute, the August new home market neither experienced a broad-based deterioration nor achieved comprehensive stabilisation. Instead, it remains in a grinding bottom phase where policy support continues to be released alongside ongoing fundamental adjustments. This period is characterised by continued improvement in year-on-year indicators, while month-on-month metrics remain volatile. The momentum of weak recovery in sales is fading, and this weakness is transmitted through payment collection channels to the funding side, further suppressing developers' land acquisition and construction commencement capabilities. The ultimate result is a continued widening of the decline in development investment.
The property market finds itself in a "post-policy floor yet-to-be-confirmed fundamentals bottom" phase, and the nature of this bottoming process is shifting from cyclical adjustment to structural reconfiguration. New construction starts persistently lagging behind sales, a rising share of long-term dormant inventory, mounting pressure from commercial office stock, and secondary market transaction volumes surpassing new home sales all collectively point to the industry's long-term transition from "incremental development" to "stock operation".
Key Findings from August Data
August served as a transitional window from the traditional off-season towards the "Golden September" period. Sales remained essentially flat on a monthly basis (floor area -0.5%, value -0.4%), but year-on-year declines widened across both metrics. Single-month sales floor area dropped 15.4% year-on-year, with the decline expanding 0.9 percentage points from July, while sales value fell 12.8%, shifting from the narrowing trend seen in July to a 2.4 percentage point expansion. The divergence between volume and price that characterised July's weak recovery failed to persist. For the January-August period, sales floor area decreased 12.1% and sales value declined 13.0%. The cumulative value decline remains 0.9 percentage points deeper than the floor area decline, indicating that lower transaction prices have provided some buffer to the sales value reduction but have not altered the underlying contraction in demand.
During the first eight months, secondary home transaction floor area reached 549.23 million square metres, up 10.6% year-on-year. Secondary homes have become the dominant force in market transactions, with trade-up demand serving as the core support for the current housing market. On the pricing front, August saw new home prices in 70 major cities fall 0.17% month-on-month, with 15 cities recording increases, 6 remaining flat, and 49 posting declines. The number of cities with month-on-month gains or flat prices stood at 21, two fewer than in July. Secondary home prices declined 0.31% month-on-month, with 62 cities reporting decreases, and all 70 cities showing year-on-year declines averaging 5.13%.
Positive signals are emerging: first-tier city new home prices shifted from flat to a 0.1% month-on-month increase. Year-on-year price declines across first, second, and third-tier cities for both new and secondary homes narrowed across the board. Shanghai's new home prices rose 3.0% year-on-year, while its secondary home prices fell only 0.8% — improvement-focused products in core cities continue to outperform. However, the breadth of new home price declines is still expanding, and secondary home month-on-month declines have re-widened.
New Home Sales: Cumulative Volume-Price Divergence Persists, Monthly Recovery Momentum Weakens
During the first eight months, new commercial housing sales floor area totalled 498.8 million square metres, down 12.1% year-on-year, with residential sales floor area falling 13.0%. New commercial housing sales value reached 4,747 billion yuan, down 13.0%, including a 13.1% decline in residential sales value. According to Ministry of Housing and Urban-Rural Development data, secondary home transaction floor area for January-August reached 549.23 million square metres, up 10.6% year-on-year.
The cumulative year-on-year decline in new home sales floor area widened by another 0.3 percentage points compared with the previous period, while the sales value decline narrowed by 0.1 percentage points, continuing the pattern of "expanding floor area declines with contracting value declines". Calculated by dividing sales value by floor area, the average transaction price for new commercial housing in January-August was 9,517 yuan per square metre, down 0.9% from 9,601 yuan in the same period last year. The cumulative value decline (-13.0%) remains 0.9 percentage points deeper than the floor area decline (-12.1%), with the volume-price divergence persisting on a cumulative basis.
Newly released data shows secondary home transaction floor area exceeding new home sales by 10.1%. The overall market presents a pattern of existing homes dominating while new homes face pressure. New home transaction volumes continue to contract, though a rising share of higher-priced improvement product transactions provides marginal support to sales values. Secondary homes have become the primary market driver, with trade-up demand forming the core support for the current housing market cycle.
August single-month figures showed a reverse dynamic: the average transaction price reached 9,780 yuan per square metre, up 3.1% year-on-year, with the value decline (-12.8%) shallower than the floor area decline (-15.4%). It bears emphasising that this average price increase primarily stems from the structural upward shift driven by a greater share of transactions in higher-tier cities, not from broad-based price appreciation. While structural shifts in transaction composition increasingly support average prices, they also indicate that lower-tier cities are experiencing more severe transaction contractions.
On August 28, the Ministry of Housing and Urban-Rural Development, the People's Bank of China, and the National Financial Regulatory Administration issued a series of new property policies. The provisions directly affecting new home sales centre on pre-sale thresholds, ready-property sales, mortgage disbursement timing, fund supervision, and loan term adjustments, with new and existing projects treated differently. Overall, these policies transfer off-plan delivery risk from buyers to developers and financial institutions, driving a structural reshaping of market confidence. In the short term, the policies signal a clear direction towards establishing a new real estate model, fostering modest sentiment repair, though a comprehensive confidence reversal is unlikely. Market transactions will likely maintain a bottoming oscillation, with any trend recovery dependent on restoring resident income expectations. Over the medium term, as pre-sale volume becomes constrained under new rules and ready-property projects gradually enter the market, new home delivery confidence should continue improving, though a lowering supply centre of gravity will begin driving transaction volume declines. As the new real estate model takes shape, market confidence anchors on project quality and living value rather than price appreciation expectations. With urbanisation entering its latter half and first-time buyer demand peaking, new home demand will centre on improvement and trade-up purchases.
August single-month sales floor area was 48.59 million square metres, essentially flat against July (-0.5%) and below the seasonal level following June's mid-year push. Year-on-year, single-month sales floor area fell 15.4%, with the decline widening 0.9 percentage points from July. Single-month sales value reached 475.2 billion yuan, down 12.8% year-on-year, a 2.4 percentage point widening from July and the lowest monthly figure since March. The resilience in sales value that price factors provided in July did not continue into August, suggesting the earlier recovery relied more on one-off compositional support rather than sustained demand improvement.
Performance diverged across property types. Office building floor area and value declines both widened (floor area -6.2%, expanding 1.3 percentage points; value -9.1%, expanding 0.9 percentage points). Commercial retail space saw its value decline narrow notably by 0.7 percentage points to -19.1%, though this remains the deepest among all property types. Residential floor area decline widened 0.3 percentage points to -13.0% with the value decline marginally narrowing 0.1 percentage points to -13.1%, making the volume-price divergence most pronounced in the residential segment.
Regional sales continued broad-based declines with diverging marginal trends. Compared with the previous period, the eastern region saw both volume and price declines widen slightly (floor area -11.6%, value -12.6%). The central region experienced floor area and value decline expansions of 0.7 and 0.6 percentage points respectively, with demand-side pressure continuing to rise and the region remaining the primary drag. The western region saw both metrics' declines continue narrowing (floor area -11.8%, value -13.3%), suggesting relatively moderated internal adjustment pressure. The northeast's declines narrowed by 0.9 and 1.4 percentage points respectively but remained the deepest of all regions (floor area -20.6%, value -22.4%). The eastern region accounted for 44.9% of sales floor area and 60.7% of sales value, down 0.3 and 0.1 percentage points respectively from the previous period.
Development Investment Continues Probing Lower Depths
For January-August, national real estate development investment reached 4,797.9 billion yuan, down 19.9% year-on-year on a comparable basis, with residential investment at 3,701.7 billion yuan, down 19.7%.
The cumulative year-on-year decline in development investment widened another 0.7 percentage points compared with the previous period, continuing to expand and remaining at historical lows with downward pressure still being released. Residential investment's decline widened 0.6 percentage points to -19.7%, with the gap to total investment widening marginally from 0.1 to 0.2 percentage points, indicating that non-residential investment pressures (offices -22.0%, commercial retail -25.5%) are more pronounced. The comprehensive contraction in investment is unlikely to change in the short term, though with a lower base from the prior year and marginal improvement in core cities, cumulative declines may gradually narrow going forward, mitigating risks of an accelerated downturn.
Land acquisition by developers remains highly concentrated in core cities such as Beijing, Shanghai, Hangzhou, and Chengdu, with developers generally avoiding regions with weak demand fundamentals and high destocking pressure. While traditional residential development continues to shrink, capital is increasingly flowing towards urban renewal, long-term rental apartments, warehousing and logistics, and industrial real estate — stock and hold-type tracks. The industry exhibits three prominent characteristics: "deep overall contraction, deep structural divergence, and accelerated stock asset revitalisation".
In monthly terms, August development investment was 497 billion yuan, up 0.7% from July though still at low levels. Year-on-year, August single-month investment fell 26.1%, with the decline narrowing 2.6 percentage points from July's -28.7%, yet still significantly deeper than levels seen in the first half of the year. The downward trend in investment shows no substantive improvement.
All property types weakened in tandem: office and commercial retail declines widened 0.1 and 0.7 percentage points to -22.0% and -25.5% respectively, with residential investment expanding 0.6 percentage points to -19.7%. Developer appetite for commercial office formats is particularly subdued. Residential investment accounted for 77.2% of the total, essentially flat with the previous period, indicating no significant structural adjustment in investment allocation.
Investment declined year-on-year across all regions. The eastern and central regions both saw declines widen 0.8 percentage points to -20.5% and -20.8% respectively. The eastern region's investment share stood at 58.9%, down 0.3 percentage points from the previous period, remaining the primary drag on overall investment. The western region's decline widened 0.4 percentage points to -16.3%, a relatively moderate decline. The northeast's decline narrowed 0.1 percentage points to -29.6%, though it remains the deepest among the four regions, which does not constitute a recovery signal.
Industry Continues Controlling Incremental Supply, Construction Scale Downtrend Unchanged
During January-August, new construction starts totalled 298.94 million square metres, down 24.8%, with residential starts at 218.4 million square metres, down 25.4%. Completed floor area reached 210.97 million square metres, down 23.7%, including residential completions of 147.98 million square metres, down 25.4%.
The cumulative year-on-year decline in new starts widened another 0.8 percentage points from the previous period, with residential starts expanding by the same margin, both sitting at their deepest decline levels for the year. The completion decline widened 0.5 percentage points to -23.7%, while residential completions marginally narrowed 0.1 percentage points to -25.4%. The construction start segment maintains its "overall contraction with localised resilience" pattern, with only improvement-type projects in core districts of first-tier and strong second-tier cities providing localised support.
The new start-to-sales ratio stood at 0.599 (versus 0.593 previously), indicating that new construction start volumes remain significantly below concurrent sales volumes. This further reveals the industry's transition from "incremental expansion" to "production based on sales and controlled incremental supply". It should be noted that a ratio below one cannot independently prove developers are "actively" contracting — declining land reserves, financing constraints, project delivery cycles, ready-property sales policy expectations, and reduced developer risk appetite could all produce effects in the same direction, with their relative weights requiring further decomposition.
The completion side is entering a lagged transmission period from earlier declines in construction starts, making rapid convergence in completion declines unlikely. Overall, the contraction at the construction end results from insufficient sales payment collection, funding constraints, and supply structure adjustments. Any recovery depends heavily on substantive improvements in sales and developer cash flow.
August single-month new starts were 31.94 million square metres, down 7.7% month-on-month and 30.5% year-on-year, with the decline widening another 2.0 percentage points from July to reach the deepest single-month decline this year. The weakening at the construction start end coincides temporally with marginal sales weakness and continued tightening on the funding side, representing the supply-side manifestation of the transmission chain.
Developer Funding Pressure Resumes Its Upward Climb
For January-August, funds available to real estate developers totalled 5,089.3 billion yuan, down 21.0% year-on-year. This included domestic loans of 688 billion yuan (down 33.3%), self-raised funds of 1,843.2 billion yuan (down 20.0%), deposits and advance receipts of 1,603.7 billion yuan (down 14.8%), and individual mortgage loans of 684.6 billion yuan (down 22.4%).
The cumulative year-on-year decline in developer funding has now persisted for 17 consecutive months, widening another 0.7 percentage points in the current period. Individual mortgage loans continue to show a relatively large decline but remain the only segment showing marginal improvement, with the decline narrowing 1 percentage point from the previous period. Domestic loans and self-raised funds posted deep year-on-year declines, expanding 1.2 and 1.5 percentage points respectively, reflecting banks' still-low risk appetite for new developer projects and insufficient market capital confidence in the property sector.
In terms of composition, deposits and advance receipts plus individual mortgage loans constituted 45.0% of total funding, up 0.4 percentage points from the previous period, indicating developer funding structures are becoming further concentrated on sales collections. Self-raised funds accounted for 36.2% of total funding, flat with the previous period. Developer funding remains in a contractionary zone overall, with structural divergence intensifying.
The August 28 policy package will directly impact three major funding sources: deposits and advance receipts, individual mortgage loans, and self-raised funds. Pre-sale deposits and advance receipts face the most immediate impact, mortgage funding effects will show with a lag, and self-raised fund pressure stems more from weakening market participant confidence. While the policies reserve some buffer space by extending development loan tenors and permitting instalment payment of land premiums, bank capital and non-performing loan assessment constraints cap that buffer. The fundamental postponement of payment collection nodes not only suppresses project cash inflows but also squeezes funds available for existing debt servicing. This means the industry must confront the reality of cash flow deceleration pressure in the near term, with the impact differing significantly between high-turnover small and medium developers and low-leverage state-owned enterprises. The pace of transitional implementation rule announcements and enforcement will directly influence how smoothly the impact is absorbed. Overall, the policy direction is now clear, but the transformation of financing logic requires capability alignment and time to digest. The near-term divergence in industry funding conditions is expected to persist.
Housing Inventory Continues Monthly Destocking, Though Structural Pressure Cannot Be Ignored
At end-August, new commercial housing units awaiting sale totalled 753.49 million square metres, down 1.1% year-on-year. Of this, floor area awaiting sale for less than three years stood at 548.19 million square metres, down 4.2%.
August-end inventory fell 5.62 million square metres from July-end, with the year-on-year decline widening another 0.3 percentage points from the previous period, as total inventory continues its monthly destocking trend. However, the structural dimension deserves closer attention. Floor area awaiting sale for under three years decreased 4.2% year-on-year, destocking at a notably faster pace than the total inventory's -1.1%, indicating that recently formed inventory is being absorbed relatively smoothly. Conversely, by extrapolating from the official total and the sub-three-year figures' year-on-year declines, floor area awaiting sale for over three years is approximately 205.3 million square metres, with an estimated year-on-year increase of around 8%. Its share of total awaiting-sale floor area has risen from 24.9% in the same period last year to 27.2%. This means: while total inventory is declining, long-term dormant inventory is accumulating. What is being cleared is predominantly "new inventory", while "old inventory" remains the unsolved core problem.
By category, residential awaiting-sale floor area was 400.83 million square metres, down 0.5% year-on-year. Office space reached 51.87 million square metres, up 1.0% year-on-year, making it the only property type showing positive growth. Commercial retail awaiting-sale floor area totalled 134.99 million square metres, down 5.0% year-on-year. Residential inventory has shifted from flat to slightly declining, representing marginal improvement. Office inventory continues to grow, while commercial retail space, despite absolute declines, still carries a lengthy inventory cycle given its sales value performance of -19.1% year-on-year. A more accurate characterisation is therefore: total inventory has begun to decline, but the inventory structure has not comprehensively improved — residential shows marginal improvement while commercial office pressure remains prominent.
It must be emphasised that commercial housing awaiting-sale figures represent only narrow inventory. Broader inventory definitions — including under-construction unsold units and existing residential land banks — are substantially larger, representing the primary source of inventory pressure while continuously tying up developer funds and land resources. Broad inventory, third and fourth-tier cities, suburban new districts, and commercial office properties remain the main risk points going forward.
August 70-City Price Index: Core Features and Data Points
Core features: August data from the National Bureau of Statistics for commercial residential price indices across 70 major cities shows prices remain in adjustment overall, though marginal positive signals are clearer than in July. First-tier city new home prices shifted from flat to rising month-on-month. Year-on-year declines for both new and secondary homes across first, second, and third-tier cities narrowed across the board. Shanghai and Hangzhou maintained notable year-on-year new home price increases, with improvement-type products in core cities showing relative resilience. Meanwhile, month-on-month declines for both new and secondary homes remain the mainstream, with secondary home month-on-month declines re-widening from July. Second and third-tier city prices continue to drift lower, with the market still in its grinding bottom phase.
Data highlights for August: Among new commercial residential properties, 49 cities posted month-on-month declines, 15 recorded increases, and 6 were flat — 21 cities showed gains or flat prices, two fewer than in July. Year-on-year, 5 cities rose and 65 declined, with the 70-city average falling 3.29%. For secondary homes, 62 cities declined month-on-month, 3 rose, and 5 were flat — 8 cities showed gains or flat prices, unchanged from the previous month. Year-on-year, all 70 cities declined, with the average falling 5.13%.
First-tier city new home prices rose 0.1% month-on-month, turning positive from July's flat reading, with Shanghai, Guangzhou, and Shenzhen rising 0.4%, 0.1%, and 0.2% respectively, while Beijing fell 0.2%. First-tier secondary home prices rose 0.1% month-on-month, with the increase easing 0.1 percentage points from the prior month. Shanghai new home prices rose 3.0% year-on-year and Hangzhou 2.2%, with units over 144 square metres continuing to lead in core cities (Shanghai +5.5%, Hangzhou +4.2%).
Overall Picture: Month-on-Month Declines Remain Mainstream, Year-on-Year Declines Narrow Across the Board
August saw the 70-city new home price average fall 0.17% month-on-month, with 15 cities rising, 6 flat, and 49 declining. Cities with rises or flat prices decreased by 2 from July. Year-on-year, the 70-city new home average fell 3.29%, with only 5 cities — Shanghai, Hangzhou, Shenyang, Dalian, and Hefei — recording increases while the remaining 65 declined. The year-on-year decline narrowed 0.12 percentage points from July's 3.41%.
Secondary home adjustment pressure remains greater than for new homes. August 70-city secondary home prices fell 0.31% month-on-month, widening slightly from July's 0.29% decline, with only 3 cities rising, 5 flat, and 62 declining. Year-on-year, all 70 cities declined, with the average falling 5.13%, narrowing 0.26 percentage points from July's 5.39%. The January-August cumulative average decline stood at 5.89%.
Compared with July, new home month-on-month declines narrowed marginally (from 0.18% to 0.17%) but the breadth of declines expanded (declining cities rose from 47 to 49). Secondary home month-on-month declines widened from 0.29% to 0.31%, with rising cities further reduced from 5 to 3, presenting a bottoming pattern of "year-on-year improvement with month-on-month volatility". It should be noted that year-on-year decline narrowing largely reflects the falling base from the prior-year period and should not be equated with price stabilisation. Month-on-month data remains the key indicator for determining turning points.
City Tier Analysis: First-Tier Stabilises First, Second and Third-Tier Still Drifting Down
First-tier cities represent the only tier where both new and secondary home prices turned positive month-on-month simultaneously. New home prices shifted from flat in July to rising, with Beijing down 0.2% while Shanghai, Guangzhou, and Shenzhen rose 0.4%, 0.1%, and 0.2% respectively. Secondary home prices rose 0.1% month-on-month, with Shanghai and Shenzhen up 0.3% and 0.1% respectively, Guangzhou flat, and Beijing down 0.1%. However, on a year-on-year basis, first-tier secondary home prices still average 2.7% lower, narrowing only 1.0 percentage points from the prior month. This indicates the current situation remains one of "decline stabilisation", not yet a trend reversal.
Second-tier new home prices fell 0.13% on average month-on-month, marginally weaker than July's 0.11% decline, with 18 of 31 cities declining, 9 rising, and 4 flat. Third-tier new home prices fell 0.24% on average, narrowing slightly from July's 0.27%, though 30 of 35 cities still recorded declines. For secondary homes, second and third-tier average month-on-month declines were 0.31% and 0.36% respectively. Third-tier levels were essentially flat with July's 0.35%, but 34 of 35 cities posted declines, indicating persistently insufficient price elasticity. The tier divergence pattern matches July: first-tier stabilising, second-tier diverging, third-tier under pressure.
Key Cities: Core City Resilience Stands Out, Weak Second-Tier and Third-Tier Cities Under Notable Pressure
Shanghai and Hangzhou were the most prominent cities in August's new home market. Shanghai new home prices rose 0.4% month-on-month (tied for first among the 70 cities with Wuxi), up 3.0% year-on-year, with a January-August cumulative average increase of 3.5% — ranking first across both the year-on-year and cumulative metrics. Hangzhou new home prices rose 0.2% month-on-month and 2.2% year-on-year, with a cumulative average gain of 2.3% for January-August. Hefei's new home prices rose 0.1% year-on-year with a 0.8% cumulative average increase, making it the best-performing city outside Shanghai and Hangzhou on cumulative average prices. Shenyang and Dalian both recorded 0.3% year-on-year new home increases, with Shenyang's secondary home prices falling only 0.9% year-on-year — the best secondary home performance among the 70 cities.
For secondary homes, Shanghai, Yangzhou, and Shenzhen recorded month-on-month increases, while Shenyang, Dalian, Ningbo, Hefei, and Guangzhou remained flat. Shanghai's secondary home prices fell only 0.8% year-on-year, notably smaller than the national average of 5.13%, making it the first-tier city closest to price stabilisation. Shenzhen's secondary home prices fell 2.7% year-on-year, Beijing 3.5%, and Guangzhou 3.8%.
Cities with deeper declines are concentrated in third-tier and select second-tier cities with weak fundamentals or high inventory pressure. Luzhou's new home prices fell 7.7% year-on-year with secondary home prices down 9.0%, the weakest among the 70 cities. Baotou new home prices fell 6.8% year-on-year, Luoyang 6.3%, and Beihai 6.2%. These cities' new and secondary home prices are both in deep adjustment territory with limited short-term recovery prospects.
Unit Size Analysis: New Home Segment Differences Converge, Secondary Homes Under Pressure Across All Segments
By unit size, the three new home segments showed further convergence in August compared with July, with units over 144 square metres still relatively advantaged. Year-on-year average declines were 3.39% for units up to 90 square metres, 3.28% for 90-144 square metres, and 3.33% for over 144 square metres. January-August cumulative average declines were 3.56%, 3.54%, and 3.42% respectively, with the large unit segment posting the smallest cumulative decline.
Structural highlights concentrate in core city improvement products. Shanghai's new homes over 144 square metres rose 5.5% year-on-year and 0.9% month-on-month, with Hangzhou up 4.2% year-on-year — both markedly above their respective city-wide levels. This indicates core city improvement demand retains support with stronger pricing resilience for premium products. Conversely, in cities like Baotou, Luoyang, and Beihai, units up to 90 square metres posted year-on-year declines generally exceeding 6.5%, with first-time buyer products facing the greatest downward pricing pressure.
Secondary homes face pressure across all segments. August 70-city secondary home year-on-year average declines were 5.24% for units up to 90 square metres, 4.99% for 90-144 square metres, and 5.33% for over 144 square metres. January-August cumulative average declines were 5.96%, 5.86%, and 5.93% respectively — with all three segments' declines concentrated in the 5%-6% range, showing no significant product structure differentiation. Units over 144 square metres posted the deepest month-on-month decline at -0.37%.
Cumulative Declines Narrow Slightly, Bottom Signals Still Insufficient — Three Clues to Monitor
On a cumulative average basis, January-August new home prices fell 3.49% year-on-year, narrowing 0.03 percentage points from the January-July reading of 3.52%. Secondary home prices fell 5.89% cumulatively, narrowing 0.12 percentage points from 6.01%. This marginal cumulative improvement stems primarily from the current month's year-on-year decline being smaller than earlier cumulative averages. However, month-on-month data still shows most cities' prices have yet to stabilise, particularly for secondary homes. The current price state more closely resembles "slowing decline slope with repeated bottom confirmation" rather than a trend reversal.
August 70-city price data reveals three characteristics. First, month-on-month declines for both new and secondary homes remain mainstream, with secondary home month-on-month declines re-widening — price adjustment has not concluded. Second, first-tier cities saw both new and secondary home prices turn positive month-on-month, with year-on-year declines narrowing across all city tiers — the market shows more explicit localised stabilisation signals than in July. Third, prices in third-tier and most second-tier cities continue drifting lower, with secondary home year-on-year declines universal, and market divergence intensifying.
Three clues warrant attention going forward. First, whether secondary home prices in first-tier and core second-tier cities can transmit from "month-on-month stabilisation" to "sustained year-on-year decline narrowing" — particularly whether the demonstration effect of cities like Shanghai, which are close to stabilisation, can spread. Second, whether improvement product transactions and new home supply structures can continue supporting core city prices. Third, the implementation effects of existing policies (provident fund system reform, housing consumption included in top-level design, purchase restriction optimisation in cities like Beijing) and the pace of resident expectation repair. If first-tier stabilisation signals can spread to more cities, the breadth of 70-city price declines should gradually narrow. Otherwise, given weakening single-month sales momentum and across-the-board weakness in the development chain, the market's grinding bottom period may extend further.
Conclusion: Policy Floor Established, Fundamentals Bottom Not Yet Confirmed
Three conclusions can be drawn from this analysis. First, the market has not re-entered a downturn. August sales remained essentially flat month-on-month, first-tier new and secondary home prices turned positive month-on-month simultaneously, and year-on-year declines narrowed across all city tiers — none of this supports a "second decline" thesis.
Second, the market has not yet stabilised either. The number of cities with declining new home prices increased to 49, secondary home month-on-month declines re-widened, development investment and new start declines continued expanding, and long-term dormant inventory continues accumulating. This indicates that recovery remains localised and structural, with year-on-year improvement substantially attributable to the falling base from the prior-year period.
Third, the full dataset points to a single transmission chain: weakening sales recovery momentum transmits through payment collection to the funding side, then to land acquisition, construction starts, and investment — forming a complete loop of "weak sales recovery failing to persist — funding constraints unresolved — development chain continuing to contract".
Therefore, the current phase is more accurately characterised as the property market being in a "post-policy floor yet-to-be-confirmed fundamentals bottom" grinding stage. The nature of this bottoming is shifting from cyclical adjustment to structural reconfiguration — new construction starts persistently below sales, rising share of long-term dormant inventory, prominent commercial office stock pressure, and secondary market transaction volumes now exceeding new home sales all point to the industry's long-term transition from "incremental development" to "stock operation".
To determine whether the market has genuinely bottomed, three types of signals should serve as criteria: first, whether 70-city home prices can record consecutive month-on-month increases, particularly for secondary homes; second, whether year-on-year declines in deposits and advance receipts and individual mortgage loans within developer funding can halt and reverse — that is, whether sales genuinely transmit through to developer cash flow; third, whether long-term inventory (floor area awaiting sale for over three years) can shift from increasing to decreasing. Until these signals emerge, the market's grinding bottom period may continue to extend.