Volume Still Contracting
New commercial residential transaction area across 50 key Chinese cities totalled about 82.99 million square metres in the first seven months of 2026, down 10.9% year on year, according to research published by CRIC Real Estate Research on August 7, 2026. The firm described the market as continuing to build a bottom in aggregate volume terms.
The headline decline is consistent with other measures of a still-shrinking primary market: national land sales revenue fell 31.5% in the first half, and top-100 developer sales fell 13.3% year on year in July.
The Structural Story Beneath the Total
CRIC's more consequential finding concerns composition rather than size. Breaking transactions down by unit floor area shows a steady shift away from entry-level product and toward upgrade housing — what the firm called the clearest structural trend of the past three years.
| Segment | Trend in 2026 |
|---|---|
| Entry-level (smaller units) | Share declining |
| 110-130 sq m | Largest single band, 26.3% in 2026 (stable at 25-26% historically) |
| Larger upgrade units | Share expanding steadily |
The 110-130 square metre band has been the single largest transaction segment throughout the period and reached 26.3% of units sold in 2026. The expansion of upgrade-oriented segments while first-time-buyer product shrinks reflects two forces: a weaker pipeline of new household formation in major cities, and the concentration of remaining purchasing power among existing owners trading up.
Why Buyers Are Trading Up
- Price-for-volume in the secondary market. Purui Digital Intelligence chairman Ding Zuyu noted that trading price for volume has been the main engine supporting secondary transactions. Across 20 major cities, secondary home sales reached 885,000 units in January-July 2026, up 6.1% year on year.
- Better product standards. Cities have promoted so-called good housing standards, and projects meeting them have shown notably faster absorption. In Shenzhen, new projects launched under the good-housing framework achieved roughly 70% average sell-through at opening in July.
- Policy tilted toward larger families. Beijing's August 8 measures grant extra provident fund loan capacity of up to 400,000 yuan for families with two or more children and up to 400,000 yuan for green-standard homes, both of which skew toward larger units.
The Secondary Market Constraint
Ding cautioned that active secondary trading is a double-edged development. Because much of that activity is driven by price concessions, the recovery of the new home market remains constrained by listing volumes and pricing pressure in the resale market. At the same time, liquidity in the secondary market is what allows existing owners to release funds and buy upgrade product, so the two markets are increasingly interdependent.
What to Watch
Three indicators will determine whether the 10.9% decline narrows further in the remainder of 2026: the pace of provident-fund-supported transactions in first-tier cities following Beijing's easing; whether the 110-130 square metre band holds above 26% of transactions; and whether new-home price increases in leaders such as Shanghai, where July prices rose 0.96% month on month, spread to a wider group of cities.
For developers, the composition shift argues for reweighting land banks toward larger, better-specified units in core urban districts rather than volume-driven suburban schemes.