Secondary home prices in China's tier-one cities rose for the fourth consecutive month through early August 2026, according to the latest housing market data, while the broader national picture remains characterized by pronounced divergence — with the 100-city index showing 92 cities recording monthly declines in July even as first-tier markets firm.
First-Tier Resilience Confirmed
The sustained rise in tier-one secondary home prices — spanning Beijing, Shanghai, Guangzhou, and Shenzhen — underscores the concentration of market recovery in China's most economically dynamic cities. Shanghai stands out as the only major city where both new and secondary home prices are rising concurrently, supported by strong underlying demand, tight supply in prime locations, and the state's active purchase of second-hand homes for rental conversion.
Online contract signing data from Beijing, Hangzhou, and Shenzhen all showed year-on-year growth in August, indicating that transaction volumes — not just prices — are responding to the cumulative effect of policy easing measures implemented since late 2025.
Divergence Defines the National Market
Outside the first tier, the market remains in a corrective phase. Among 100 monitored cities, the average secondary home price declined 0.44% month-on-month in July, with 92 cities recording declines. The divergence reflects fundamental differences in demand dynamics: core cities benefit from population inflows, employment opportunities, and limited new supply, while lower-tier markets continue to grapple with inventory overhang and population outflows.
Landlord sentiment varies accordingly — in core city districts, sellers increasingly hold firm on price expectations, while in weaker markets, sellers continue to accept discounts to complete transactions. This divergence in price expectations further entrenches the structural differentiation of China's housing market.
Structural Shift Toward Secondary Markets
Underlying the price dynamics is a profound structural shift: secondary home transactions now account for an increasing share of total housing activity. In the first half of 2026, secondary transactions in 30 key cities reached 68% of combined new and secondary volume, up from 65% in 2025. In Shanghai, secondary homes accounted for 85% of total transactions in Q1 2026; in Beijing, 81%.
This "stock optimization" phase — in which the market increasingly revolves around existing housing circulation rather than new construction — has significant implications for pricing dynamics, policy design, and developer strategy.
Policy Implications
The persistence of first-tier secondary price appreciation, alongside continued weakness in lower-tier markets, supports a targeted rather than broad-based policy approach in the second half of 2026. Analysts expect continued refinement of purchase restrictions, expanded housing provident fund support, and further development of state purchase schemes for existing homes — all measures that disproportionately benefit core city markets while addressing inventory challenges where they are most acute.