Updated on 21 August 2026
China sold 1.79 billion square metres of new homes in 2021 and 881 million in 2025, and sales kept falling in 2026, reshaping demand for developers, agencies and the brands that furnish Chinese homes.
By Daxue Consulting
In the first seven months of 2026, new commercial housing sales in China fell 11.8% YoY to 450.2 million square metres, and sales value fell 13.1% YoY to RMB 4.27 trillion, according to the National Bureau of Statistics (国家统计局). Real estate investment fell 19.2% YoY to RMB 4.30 trillion, new construction starts fell 24.0% and completions 23.2%.
The decline follows a long cycle. Sales climbed for several years to a peak of 1.79 billion square metres in 2021, then roughly halved by 2025. Meanwhile, prices in tier-1 cities have nearly stabilised while smaller cities keep falling, and households increasingly prefer finished or second-hand homes. This analysis of the Chinese real estate market examines the cycle, price trends by city tier, buyer behaviour and the implications for real estate players and home brands.
| Daxue Overview |
|---|
| Sales: 450.2 million m² of new homes sold in January-July 2026, -11.8% YoY (NBS). |
| Investment: RMB 4.30 trillion in January-July 2026, -19.2% YoY; foreign capital used by developers RMB 400 million, -77.3% YoY. |
| Prices: in July 2026, new-home prices were -1.1% YoY in tier-1 cities and -4.2% YoY in tier-3 cities. |
| Buyers: 23.5% of urban depositors expected prices to fall in Q3 2025, against 9.1% expecting a rise (PBOC). |
| Home brands: furniture retail sales -4.5% YoY and home appliances -6.6% YoY in January-July 2026 (NBS). |
Chinese real estate market: key figures
Exhibit 1: Sales, investment and construction all fell at double-digit rates in the first seven months of 2026
| Indicator | Figure | Period | Source |
|---|---|---|---|
| New commercial housing sold | 450.2 million m², -11.8% YoY | Jan-Jul 2026 | NBS |
| Of which residential | 374.3 million m², -12.7% YoY | Jan-Jul 2026 | NBS |
| Sales value | RMB 4.27 trillion, -13.1% YoY | Jan-Jul 2026 | NBS |
| Real estate investment | RMB 4.30 trillion, -19.2% YoY | Jan-Jul 2026 | NBS |
| New construction starts | 267.0 million m², -24.0% YoY | Jan-Jul 2026 | NBS |
| Floor area under construction | 5.58 billion m², -12.7% YoY | End July 2026 | NBS |
| Unsold commercial housing | 759.1 million m², -0.8% YoY | End July 2026 | NBS |
| Individual mortgage loans received by developers | RMB 604.0 billion, -23.5% YoY | Jan-Jul 2026 | NBS |
Source: compiled by Daxue Consulting.
The cycle: seven years of growth, then a halving
Exhibit 2: New-home sales peaked in 2021 and roughly halved within four years
| Year | New homes sold (million m²) | Sales value (RMB trillion) | Real estate investment (RMB trillion) | Unsold inventory, year-end (million m²) |
|---|---|---|---|---|
| 2014 | 1,206 (-7.6% YoY) | 7.63 | 9.50 | 622 |
| 2016 | 1,573 (+22.5% YoY) | 11.76 | 10.26 | 695 |
| 2021 (peak) | 1,794 (+1.9% YoY) | 18.19 | 14.76 | n.a. |
| 2025 | 881 (-8.7% YoY) | 8.39 | 8.28 | 766 |
| Jan-Jul 2026 | 450 (-11.8% YoY) | 4.27 | 4.30 | 759 (end July) |
Sources: National Bureau of Statistics releases for 2014, 2016 (via China Securities Journal), 2021, 2025 and January-July 2026.
In 2025, total new commercial housing sold in China was below the residential figure alone for 2012 (985 million square metres). Unsold inventory, however, remains close to its 2025 level, which suggests that supply is adjusting more slowly than demand.
Tier-1 prices are stabilising while smaller cities keep falling
In July 2026, new-home prices in tier-1 cities were unchanged from June and 1.1% lower YoY, according to NBS senior statistician Yang Caifang (杨彩芳). Shanghai (+0.2%), Guangzhou (+0.1%) and Shenzhen (+0.2%) rose month on month, while Beijing fell 0.3%.
Smaller cities show a different picture. New-home prices were 2.8% lower YoY in tier-2 cities and 4.2% lower in tier-3 cities; second-hand prices fell 5.1% and 5.8% YoY respectively. The data suggests that China now has several property markets rather than one: a flat in central Shanghai and a flat in a tier-3 city behave as different assets.
Exhibit 3: Price declines deepen as city tier falls (July 2026, YoY)
| City tier | New homes | Second-hand homes |
|---|---|---|
| Tier 1 | -1.1% | -3.7% |
| Tier 2 | -2.8% | -5.1% |
| Tier 3 | -4.2% | -5.8% |
Source: National Bureau of Statistics, 70-city price index, August 2026.
Buyers remain cautious about prices, credit and delivery
Price expectations. In the People’s Bank of China’s urban depositor survey for the third quarter of 2025, 23.5% of households expected prices to fall in the next quarter, against 9.1% expecting a rise (PBOC, 2025). In the same survey, 62.3% preferred to increase savings deposits.
Credit. Individual mortgage loans received by developers fell 23.5% YoY in January-July 2026 (NBS).
Delivery risk. Many families bought off-plan in the 2010s and some waited years for their flat. Vanke alone delivered 117,000 homes in 2025 under the national “guaranteed delivery” (保交房) programme (Yicai (第一财经), 2026). Finished and second-hand homes therefore appear safer to many buyers.
How the market has changed over the past decade
Exhibit 4: From a growth market driven by investors to a market of end-users
| 2016 | Today | |
|---|---|---|
| New homes sold | 1.57 billion m², +22.5% YoY | 881 million m² in 2025, -44% vs 2016 |
| Sales value | RMB 11.8 trillion | RMB 8.4 trillion in 2025 |
| Main policy concern | Prices rising too fast | Prices and sales falling |
| Typical buyer | Investor or upgrader buying off-plan | End-user, often choosing a finished or second-hand flat |
| Price trend | Sharp rises in tier-1 and many tier-2 cities | Tier-1 close to stable; tier-3 down about 4% YoY |
| Policy tools | Purchase restrictions, higher down payments | Lower mortgage rates, easing of purchase rules |
| Developers | Fast expansion, record land purchases | Losses, debt restructuring, priority on delivering sold homes |
Sources: NBS, Yicai. Policy and buyer descriptions are Daxue Consulting’s reading of each period.
Developers, agencies and investors face a smaller, more selective market
Developers. The model of buying land, pre-selling flats and using the cash for the next project no longer works at scale. Vanke, long seen as one of the safest developers, reported a net loss of about RMB 82 billion for 2025 and relies on shareholder loans from Shenzhen Metro Group (Yicai, 2026).
Agencies and brokers. With buyers turning to existing homes, revenue is shifting from new-home marketing fees to resale transactions, rentals and renovation services.
Property services. With fewer new projects, value moves to the 5.58 billion square metres already under construction and to existing homes: maintenance, renovation and community services.
Foreign investors. Foreign capital used by developers was RMB 400 million in January-July 2026, down 77.3% YoY (NBS). Investors still active tend to target specific assets in tier-1 cities rather than the national market.
Furniture and home appliance brands lose the new-home engine
For home brands, new-home deliveries used to drive first purchases of kitchens, sofas, air conditioners and fridges. In January-July 2026, retail sales of furniture fell 4.5% YoY, home appliances and audio-visual equipment 6.6% and building and decoration materials 9.5%, while total retail sales grew 1.2% (NBS, August 2026).
The comparison base is high. In 2025, government trade-in subsidies pushed home appliance retail sales to a record RMB 1.17 trillion, with more than 129 million appliances sold through the programme, according to the Ministry of Commerce (Xinhua (新华社), January 2026). More than 90% of appliances sold under the 2025 programme were in the top energy-efficiency grades.
Three shifts follow for home brands:
- Replacement rather than first purchase. Demand increasingly comes from households upgrading products in homes they already own.
- Renovation of existing homes. Each resale flat is a potential kitchen, bathroom and furniture project, often decided within weeks of the purchase.
- Smaller, more connected products. Compact and multi-function products fit end-users in smaller homes better than large showroom pieces.
Daxue Take: implications for real estate players and home brands
- For developers, a focus on finished homes in fewer cities may reduce delivery risk perceived by buyers. This depends on access to financing, which remains tight while mortgage inflows fall.
- For agencies, resale, rental and renovation services are where volumes are holding. The option is stronger in tier-1 cities, where prices are close to stable.
- For foreign investors, asset-by-asset selection in tier-1 cities is more consistent with the data than a national allocation. This view could change if tier-2 prices stabilise.
- For furniture and appliance brands, the 2025 subsidy year created a high base; growth in 2026 is more likely to come from replacement, energy efficiency and renovation than from new-home deliveries. Brands with strong after-sales networks are better placed to capture replacement demand.
- For brands planning store networks, the divergence between city tiers suggests reviewing exposure to tier-3 cities, where prices and household confidence are weakest.
Questions for leadership teams: What share of sales still depends on new-home deliveries? Which city tiers carry the most risk? How is the brand positioned for replacement and renovation?
What to watch next
- NBS monthly property data, especially whether tier-1 prices turn positive YoY.
- Any new support measure for first-time buyers or mortgage costs.
- Developer debt restructurings and delivery figures under the guaranteed delivery programme.
- Home appliance and furniture retail sales during the autumn promotion season.
FAQ about the Chinese real estate market
Is the Chinese property market recovering? Not in volume. New-home sales fell 11.8% YoY and investment 19.2% YoY in January-July 2026 (NBS). Tier-1 prices are close to stable, while tier-3 prices are still about 4% lower YoY. For the developers’ side, see the overview of the real estate industry in China.
How much have house prices fallen in China? Prices have declined for several years. In July 2026, new-home prices were 1.1% lower YoY in tier-1 cities and 4.2% lower in tier-3 cities (NBS).
How does the property slump affect furniture and home appliance brands? Fewer new homes mean fewer first purchases. Furniture retail sales fell 4.5% YoY and home appliances 6.6% YoY in January-July 2026, after a subsidy-driven record in 2025.
Which Chinese cities are the most resilient? Tier-1 cities. In July 2026, Shanghai, Guangzhou and Shenzhen saw new-home prices rise month on month, while tier-3 cities kept falling (NBS). Related analyses cover the Chinese middle class and the retirement economy.
About Daxue Consulting
Daxue Consulting is a market research and strategy consulting firm focused on China. For real estate players, Daxue Consulting conducts city-by-city demand studies, buyer and tenant interviews and competitive benchmarking of projects and services. For home appliance and furniture brands, it runs consumer surveys and in-home interviews, store checks across city tiers and social listening on Xiaohongshu and Douyin. Its early research on Beijing’s residential market was carried out with Scout Real Estate. Learn more about our market research and strategy services, or contact our team.
Author: Daxue Consulting
