Latest data covering January to August reveals a 19.9% year-on-year decline in real estate development investment, a 0.7 percentage point widening from the pace seen in the first seven months. Nonetheless, notable improvements are appearing across overall transaction volumes, pricing trends, and inventories of newly built commercial housing.
In response to media inquiries about whether fresh signs of stabilization are emerging in the property sector, Fu Linghui, spokesperson for the National Bureau of Statistics, addressed reporters on the 15th at a State Council Information Office press conference. He explained that since the start of the year, various regions and departments have implemented city-specific measures, refining real estate policies to control new supply, reduce inventory, and optimize the supply structure. Efforts have included revitalizing existing commercial housing through multiple channels, resolving stock overhangs, advancing urban renewal initiatives, actively promoting adjustments and enhancements to the housing system, and accelerating the creation of a new development framework for the property market. These measures are now demonstrating progressively tangible results.
He outlined that the improvements are primarily evident in three areas: first, a recovery in overall real estate transaction volumes; second, a narrowing in the year-on-year decline of property transaction prices; and third, a continued reduction in the inventory of newly built commercial housing.
As China's property market enters a new phase of development, the structure of market transactions is undergoing profound change. The historical dominance of new home sales is gradually shifting toward a market increasingly driven by transactions of existing homes. According to recent data released by the Ministry of Housing and Urban-Rural Development, the contracted floor area for second-hand home transactions reached 550 million square meters from January to August, surpassing new home sales area for several consecutive months.
In terms of growth rates, the sales area of newly built commercial housing fell by 12.1% year-on-year during the January-August period, while the contracted transaction area for second-hand homes rose by 10.6% year-on-year. Although new home sales have contracted, the overall volume of property transactions has stabilized, buoyed by the increase in existing home sales.
Regarding pricing, among 70 large and medium-sized cities, 38 cities recorded a narrower year-on-year decline in new home prices compared with the previous month. Price declines in first-tier, second-tier, and third-tier cities narrowed by 0.2, 0.1, and 0.1 percentage points, respectively, relative to the prior month. For second-hand homes, 48 of the 70 cities saw their year-on-year price declines narrow in August. In first-tier, second-tier, and third-tier cities, these declines narrowed by 1.0, 0.2, and 0.2 percentage points, respectively, from the previous month.
Local governments are actively adopting measures such as home purchase subsidies, trade-in programs for old homes, and converting inventory into affordable housing to facilitate the reduction of commercial housing stock. These efforts are yielding positive outcomes. By the end of August, the nationwide floor area of unsold newly built commercial housing had declined by 1.1% year-on-year, marking the sixth consecutive month of decreases. Notably, the inventory of units within three years of completion fell by 4.2%, indicating that short-term stock reduction efforts are proving particularly effective.
Fu Linghui emphasized that the supply-demand dynamics in China's property market have undergone significant shifts in recent years, with meeting residents' housing needs more effectively emerging as the new trend. Current demands are diversifying, moving toward preferences for better quality and suitability, with growing interest in smart, green, and age-friendly housing. However, the existing operational model of the property market is increasingly ill-suited to these new conditions, necessitating accelerated transformation in the sector's development approach.
He noted that relevant authorities have this year deepened reforms to the housing provident fund system and refined regulations governing commercial housing sales and related support systems, all aimed at fostering a new development model. Looking ahead, as these policies continue to be implemented, they are expected to contribute to the transitional development of China's property market and better satisfy the aspirations of residents for an improved quality of life.