A Structural Shift
China's housing market has crossed a historic threshold in 2026. According to data from the Ministry of Housing and Urban-Rural Development, second-hand home transactions have officially exceeded new home sales for the first time, accounting for over 50% of total residential transactions in the first half of the year.
What the Data Shows
This marks a fundamental transition from a market dominated by new-build sales to one driven by existing housing stock — a pattern long seen in mature markets like the United States and United Kingdom. The shift reflects several converging factors:
- Inventory buildup: Years of rapid development have created a substantial stock of second-hand homes
- Price differentials: Second-hand homes often trade at discounts to new builds
- Policy support: Measures facilitating secondary market transactions
Divergent Price Trends
According to research covering 100 cities, new home prices rose 0.59% in the first half of 2026, reaching an average of 17,184 yuan per square meter in June. However, this increase was driven largely by luxury projects — a "structural rally" rather than broad-based appreciation. In contrast, second-hand home prices fell 2.9% over the same period, with June alone seeing a 0.42% month-on-month decline and a 7.68% year-on-year drop.
Market Implications
The dominance of second-hand transactions signals China's entry into a "stock-based" housing era. Developers will increasingly compete with existing inventory, and pricing power will shift toward buyers in secondary markets. This structural change will reshape business models across the real estate value chain.