China's secondary housing market remained under pressure in July 2026, with 92 out of 100 monitored cities recording month-on-month price declines, according to data from the China Index Academy. However, a small cohort of eight cities bucked the trend with price increases, while Shanghai continued to stand out as the only major city where both new and secondary home prices rose concurrently — highlighting the increasingly polarized nature of China's housing market recovery.
Secondary Market Snapshot
The average secondary home price across 100 monitored cities fell 0.44% month-on-month in July, with the decline slightly wider than June's contraction. The persistent weakness in the secondary market reflects ongoing buyer hesitation, as many purchasers — particularly upgraders — prefer new-build properties, especially given the policy incentives available for first-time and improvement-focused buyers in core cities.
Among the eight cities that recorded secondary price increases in July, the gains were generally modest — with Shanghai again among the outperformers. Secondary home price growth in Shanghai has now extended for multiple consecutive months, driven by strong underlying demand, relatively tight supply of quality secondary stock, and the city's growing appeal as a destination for domestic migration.
New Build vs. Secondary: A Growing Divide
Analysts note that the divergence between new-build and secondary market performance reflects a structural shift in buyer preferences. With new developments increasingly meeting the "good housing" standard — higher space per unit, smart home features, enhanced green building credentials, and improved community facilities — buyers with upgrade budgets are showing a clear preference for new properties.
This preference is reinforced by policy design: many cities offer more favorable purchase条件和 financing terms for buyers of first homes, which tend to be new-build units, creating a structural advantage for the new development market over the secondary market.
Rental Market Holds Steady
Meanwhile, the residential rental market showed signs of life in July, with the average rental rate across 50 monitored key cities rising 0.13% month-on-month — the highest monthly increase in several months. The improvement was attributed to the summer graduate recruitment season, which generates significant temporary rental demand in major cities as young professionals relocate for new jobs. The average rental rate stood at 34.01 yuan per square meter per month, though it remained 2.62% below the year-ago level.
Policy Implications
The continued weakness in secondary home prices has important policy implications. While new-build market strength is positive for developer balance sheets and land market activity, the secondary market's struggle limits the ability of existing homeowners to sell and upgrade — a dynamic that can dampen overall transaction volume growth and slow the circulation of housing inventory. Policymakers are closely monitoring secondary market conditions as they calibrate the pace of further housing policy adjustments in the second half of 2026.