Summary of Key Findings
Recent changes have been observed in the secondary housing market of key cities: both the number of new listings and the total inventory of properties for sale have declined from high levels. Homeowners have shifted from a rush to sell their properties to a more cautious attitude, waiting to see how things develop. The activity level in transactions remains higher than in previous years, and prices in core areas have begun to stabilize or even show a slight increase. These signs indicate that the supply and demand dynamics in the housing market are improving, and market confidence is gradually recovering.
1. Decline in Listing Volume: New Listings Down by 40%, Inventory Also Falling
The situation where homeowners were rushing to sell their properties has changed. In May this year, there were only 120,000 new listings of second-hand homes in the 25 key cities, which is a decrease of over 40% compared to the same period last year. The total inventory also decreased, falling by 1.6% month-on-month to 2.13 million units, and by 4.3% from the peak in October last year.
The changes are even more pronounced in core cities like Beijing and Shanghai: the inventory of second-hand homes in Beijing has decreased by 1.1% year-on-year, while in Shanghai it has dropped by 18.5%. Although the inventory in Guangzhou and Shenzhen is still high, transactions have picked up since policy improvements were implemented at the end of April, which could lead to a decrease in listings as well. This suggests that the number of properties available for sale is no longer being offered aggressively.
2. Shift in Homeowners' Attitudes: From Rush to Sell to Caution and Waiting
Why has the volume of listings decreased? The main reason is that homeowners' expectations have improved:
1. Active Transactions Boost Confidence: Secondary housing sales have been strong this year, and the enthusiasm for buying has lasted longer than in previous years. Homeowners see that their properties are selling, so they are no longer eager to sell them at reduced prices.
2. Policy Improvements Provide Support: Cities such as Shanghai and Shenzhen have adjusted their housing policies (e.g., lowering entry barriers for home purchases), making homeowners feel more confident about the market stability.
3. Stabilization of Prices: The decline in second-hand housing prices has slowed, with prices in Shanghai even increasing for three consecutive months. Homeowners believe that it might be more profitable to wait a while before selling.
4. Dissipation of Urgent Sales: Many homeowners who were in a hurry to sell their properties due to need for replacement or financial constraints have already done so. The remaining homeowners are less eager to sell, as they do not urgently need the money.
3. Sustained Transaction Activity: Not a Flash in the Pan, but Genuine Recovery
This year's increase in secondary housing transactions is not a short-term surge; it shows sustained momentum:
- In May, 141,000 second-hand homes were sold in 20 cities, a decrease of 9% month-on-month but an increase of 19.3% year-on-year, with the growth rate expanding by 6.3 percentage points compared to April.
- The total number of transactions in the top 20 cities in the first five months was 629,000 units, 4.4% more than last year. The volume of transactions in the 14 weeks after the Spring Festival has also increased by 13% compared to the same period in 2025.
- First-tier cities have performed particularly well: Beijing saw 16,000 sales in May, the highest figure for the same period in nearly five years; Shanghai recorded 28,000 sales, a year-on-year increase of 30.9%. This indicates that both first-time buyers and those looking to upgrade their homes are indeed entering the market.
4. Prices Starting to Rise: Signs of Price Stability in Core Areas
The decrease in listings and the increase in transactions have directly led to price stabilization. In core areas of Beijing, prices in some neighborhoods have begun to rise:
- The average price in Beixin Jiayuan, Haidian District, was 50,800 yuan per square meter in May, a month-on-month increase of 2.1%;
- Yuexiu Yuan and Taiyang Yuan also saw price increases of 1.8% each.
The management of I Love My Home also noted that the decrease in listings in first-tier cities has reduced supply pressure, which is conducive to price stability. Yan Yuejin mentioned that prices in core cities like Shanghai have stopped falling and are stabilizing, reversing the tendency to wait for prices to drop before buying, encouraging more people to consider purchasing.
5. The Significance of a Positive Market Trend: Balance Between Supply and Demand, Recovery of Confidence
These changes indicate that the housing market is moving from a situation of oversupply to a more balanced state. Homeowners are no longer in a hurry to sell, and buyers are no longer hesitant. The cumulative effect of policy improvements is beginning to show, with both first-time and improvement-driven demand entering the market. For ordinary people, there may be fewer properties available for purchase (due to the decrease in listings), but the market is more stable, so there's less concern about prices dropping soon after buying. For homeowners, there's no need to rush into selling; they can wait for more reasonable prices. Overall, the housing market is gradually emerging from a period of adjustment and is moving in a healthier direction.