Summary of Key Points
In May 2026, the real estate market continued its momentum during the "Golden March and Silver April" period, experiencing a "Red May" phenomenon: sales of new homes in 50 key cities across the country were on par with those during the "mini-boom" in March, and sales by the top 100 real estate companies increased significantly month-on-month (by 17.59%). First-tier cities performed exceptionally well, with cities like Shenzhen and Shanghai frequently seeing all homes sold within a single day. The continuous implementation of new policies (a total of 58 local initiatives) played a crucial role in supporting this trend. However, the market is still in a stage of "spotty, structural improvement," with sales in second-tier cities declining slightly as the industry continues to recover from its lows, and differentiation is expected to persist.
I. Real Estate Sales in May: A "Red May" with Nearly 20% Growth
Real estate sales saw a noticeable rebound in May: the top 100 companies generated total sales of 328.78 billion yuan, an increase of nearly 50 billion yuan compared to April (a month-on-month rise of 17.59%). The actual funds that real estate companies received also increased by 14.72%. Among the leading companies, Poly and China Overseas Land both surpassed 100 billion yuan in sales for the first five months (only Poly had achieved this last year), with China Overseas Land rising from third place to second. In contrast, Greentown China dropped three places, with its sales declining from 96.4 billion yuan last year to 73.7 billion yuan this year.
However, the number of companies with sales over 10 billion yuan decreased by five (from 33 to 28), and the number of those with sales over 5 billion yuan decreased by eleven. This does not mean these companies have "disappeared"; rather, it reflects the industry's transformation as they are focusing on building fewer new homes to reduce inventory and exploring new business models such as managing existing properties or developing houses for others (under contract construction). This is a necessary part of the industry's transition.
II. First-Tier Cities Become the Main Drivers: Shenzhen and Shanghai Lead with "Daily Sold Out" Phenomena
Sales in first-tier cities increased by 11% month-on-month and 6% year-on-year, becoming the driving force behind the market growth. The hottest markets were Shenzhen and Shanghai:
- Shenzhen introduced a new policy at the end of April that allowed non-residents with a residence permit to buy homes, effectively giving a "buying ticket" to people from all over the country holding such permits. During the May Day holiday, visitation to sales offices increased by 30-50%, and subscription volumes rose by 20-30%. On May 23, two luxury housing projects were sold out in just one day.
- A new project developed by Shimao in Shanghai sold all 212 units on its debut on May 29.
These "daily sold out" events are not random; core cities have large populations and stable demand, and the relaxation of policies has directly fueled market activity.
III. A Compendium of Policies: From the Central Government to Local Authorities, Making Buying a Home Easier
Policy support was strong in May:
- The central government promoted urban renewal (such as renovating old residential areas), provided financial assistance, and ensured that permanent residents have access to basic public services (education and healthcare) to support urban development.
- Local governments introduced 58 new policies, including 39 that improved the housing provident fund system (for example, relaxing the criteria for identifying first-home purchases—previously, having a loan history could be considered a second home purchase; now, only the current housing situation is considered); they also increased loan amounts and allowed parents to use their provident funds to help their children buy homes.
- Twelve policies focused on building better-quality housing (for instance, Guangzhou required all new homes to meet high standards for livability).
These measures aim to lower the barriers to home ownership and reduce financial burdens, encouraging more people to purchase homes.
IV. The Market Has Not Yet Seen a Widespread Upward Trend: Only Core Cities Are Improving
Don't assume that the entire real estate market is booming; in reality, only core cities (first-tier) and individual projects are performing well. Overall, the situation remains "structural":
- Sales in second-tier cities decreased by 3% month-on-month, falling behind the pace of first-tier cities.
- Many third- and fourth-tier cities remain sluggish.
It's like a "spark" that has ignited growth in only a few areas; confidence in the market has not fully recovered, and people are still more inclined to buy homes in core cities.
V. Future Trends: June May See Continued Momentum in Core Cities, but Differentiation Will Persist
In June, core cities are likely to continue their strong performance:
- Real estate companies will release their semi-annual reports and intensify marketing efforts (such as offering discounts and gifts).
- High-quality new projects in first-tier cities will be launched, attracting buyers.
However, differentiation will continue: first-tier cities and strong second-tier cities (like Hangzhou and Chengdu) may see steady growth, while third- and fourth-tier cities will face challenges. Within the same city, properties in good locations with high quality will sell well, while those in remote areas with poor quality will remain unsold.
The industry believes that 2026 is a critical year for confirming the market's bottom; we are still in the recovery phase, and it will take time for the entire market to improve.
In Summary: The real estate market showed signs of improvement in May, but this was mainly limited to core cities. Policies have played a supportive role, and the future direction will depend on continued differentiation. Investing in core cities is likely to be a wise choice.