China’s Ministry of Housing and Urban-Rural Development expects a shift in the housing market over the next five years, with new home sales slowing while second-hand home transactions rise. The ministry plans to reduce housing inventory by combining urban renewal projects, redevelopment of urban villages, and the repurposing of existing commercial housing for affordable and resettlement housing.
“The rising share of second-hand housing transactions is expected to be a key trend in the coming period, and the new and second-hand housing markets should be viewed as a unified whole,” said the National Housing and Urban-Rural Construction Work Conference, held December 22–23.
Looking ahead to the 15th Five-Year Plan period (2026–2030), the conference said that housing and construction work in the coming five years should not only accurately grasp major shifts in the real estate market’s supply and demand and acknowledge that China’s new-type urbanization is still ongoing, with significant potential for optimizing and adjusting urban stock, but also recognize that as cities enter a stage of stock development, a new housing market trend will emerge, with new housing transactions declining while second-hand housing transactions rise.
According to the conference, during the 14th Five-Year Plan period, the goals of ensuring housing delivery and project completion were fully achieved, with nationwide cumulative sales of new housing reaching about 5 billion square meters, individual housing provident fund loans totaling 6.5 trillion yuan, and support enabling contributors to withdraw 9.4 trillion yuan from the provident fund for housing-related purposes.
Despite progress in new housing construction and project completions, the real estate market has entered a phase of abundant supply but weak demand. Rising nationwide housing inventories continue to limit real estate companies’ investment willingness and weigh on housing price stabilization.
A recent report from KPMG China showed that from January to November 2025, the sales area and investment completion of residential commercial housing reached only 48% and 62%, respectively, of the same period in 2021, indicating that the real estate market remains in an oversupply state. In terms of prices, as of November 2025, the indices for new and second-hand housing had fallen 12% and 21%, respectively, from their peaks in August 2021. Inventory levels remain high as well, with the inventory-to-sales ratio in the ten major cities projected to stay at 21 months by the end of 2025, a historical high.
In recent months, housing inventory pressure has eased slightly. Data from the National Bureau of Statistics (NBS) indicate that the area of unsold housing has fallen for nine consecutive months, with unsold area 45.85 million square meters in November smaller than in February. At the same time, new construction starts have declined, helping to reduce in-progress supply and improve the balance between supply and demand.
In addition, market data indicate that in November, the number of newly listed second-hand homes in several key cities declined both year-on-year and month-on-month. This reduction in new listings helps relieve the accumulation of existing inventory and supports a healthier supply-demand balance in the second-hand housing market.
In planning next year’s economic work, the 2025 Central Economic Work Conference stressed stabilizing the real estate market through city-specific measures to control new supply, reduce inventory, optimize housing supply, and promote the acquisition of existing commercial properties for key purposes such as affordable housing.
The National Housing and Urban-Rural Construction Work Conference further emphasized that “stabilizing the real estate market” will be one of the four key tasks for housing and construction departments in the coming year.
Regarding the emphasis on “city-specific measures to control new supply, reduce inventory, and optimize supply” for stabilizing the housing market, the conference further noted that revitalizing existing housing inventory should involve “combining urban renewal and redevelopment of urban villages to fully utilize existing land, and promoting the acquisition of existing commercial housing for purposes such as affordable housing, resettlement housing, dormitories, and housing for talent.”
Meanwhile, efforts to “control new supply” and “optimize supply” should extend to the affordable housing sector, including “optimizing and precisely implementing affordable housing supply, carrying out housing quality improvement projects, and systematically advancing the construction of “good houses,” it said.
In addition to optimizing the housing supply structure and clearing excess market inventory, the key tasks for stabilizing the housing market in 2026 focus on three areas: first, preventing and mitigating risks related to real estate companies’ debt; second, better meeting homebuyers’ legitimate financing needs; and third, integrating market stabilization with transformation efforts, strengthening supervision of sales funds, and effectively protecting homebuyers’ legal rights.
According to the conference, in 2026, the real estate project “white list” system will be further utilized to support the reasonable financing needs of real estate companies, and municipal governments are expected to fully exercise their regulatory autonomy, adjust and optimize policies as needed, support both rigid and improvement housing demand, and promote the stable operation of the real estate market.
On the demand side, the conference mentioned further deepening reforms of the housing provident fund system.
Additionally, the conference emphasized the need to accelerate the establishment of a new real estate development model, building foundational systems in an orderly manner. In real estate development, the corporate project company system should be firmly implemented, while in financing, a lead-bank system should be promoted. For commercial housing sales, the completed home sales model should be advanced to ensure “what you see is what you get,” fundamentally preventing delivery risks. Where pre-sales continue, supervision of pre-sale funds should be standardized to effectively protect homebuyers’ legal rights.
Looking ahead to the construction of the “new real estate development model” over the next five years, the conference emphasized that the focus must remain on ensuring people’s housing security, while carefully balancing current and long-term goals, top-level planning and city-specific measures, market development and risk prevention, rental and ownership, new supply and existing stock. It also stressed the need to combine policy support with reform and innovation to ensure a smooth and orderly transition from the old model to the new one.