Summary of Key Points
The real estate market in the first half of 2026 presented a mixed performance: despite the overall decline in sales for the top 100 real estate companies, the rate of decrease has narrowed for four consecutive months. Leading central and state-owned enterprises dominate the market, while the number of companies with annual sales exceeding 100 billion yuan has decreased, intensifying competition. Sales from first-tier cities have surpassed those from second-tier cities, becoming the main source of performance for real estate firms. Larger-sized luxury homes and homes for first-time home improvements have sold well. The Matthew effect—where the strong get stronger—is accelerating, leading to a division of real estate companies into two camps: leading central enterprises focusing on core cities and regional private companies serving local markets. A full recovery in the market is still contingent on structural improvements.
I. Overall Sales
Although the total sales of the top 100 real estate companies decreased by 1.58 trillion yuan year-on-year, the rate of decline narrowed by 1.3 percentage points compared to the first five months, indicating a gradual improvement in the market. Notably, sales in June increased by 11.8% month-over-month, driven by heightened activity in key cities. However, the industry is still in an adjustment period. Last year, there were four companies with annual sales exceeding 100 billion yuan; this year, only three remain. The number of companies with annual sales exceeding 10 billion yuan has also decreased from 46 to 34, indicating challenges for many smaller firms.
II. Leading Enterprises
In the first half of the year, only three real estate companies achieved annual sales of over 100 billion yuan, all of which were central state-owned enterprises: Poly (135.1 billion yuan), China Overseas Land (134.3 billion yuan), and China Resources (116.5 billion yuan). The competition between Poly and China Overseas Land was particularly fierce, with a difference of only 800 million yuan in sales. More importantly, in terms of actual cash proceeds (not including revenue from cooperative projects), China Overseas Land outperformed Poly by 171 million yuan. Other top companies, such as China Merchants and Greentown, also performed well, but the gap in sales between them and the other firms widened. For example, Vanke, ranked tenth, had sales of only 35 billion yuan. Companies like China Overseas Land and China Merchants are focusing on core cities, where their properties sell quickly.
III. Urban Differentiation
First-tier cities have become the preferred market for real estate companies, accounting for a larger share of sales than second-tier cities. This change is due to leading firms investing in prime locations in Beijing, Shanghai, Guangzhou, and Shenzhen. Factors such as relaxed purchase restrictions, lower down payments, and reduced interest rates have contributed to better sales performance in these cities. Nine real estate companies, including China Overseas Land, China Resources, and China Merchants, saw over 50% of their sales come from first-tier cities.
IV. Product Trends
Larger-sized luxury homes (over 200 square meters) and homes for first-time home improvements (90-140 square meters) have seen the strongest growth, accounting for 25.3% and 40.8% of total sales respectively. This suggests that wealthy individuals are more inclined to purchase larger, higher-quality homes, while ordinary families are primarily looking to upgrade to more spacious residences. The share of smaller-sized homes is declining, possibly due to the cautious attitude of the demand side or a preference for cost-effective improvement options.
V. Industry Trends
The Matthew effect is intensifying, with central state-owned enterprises showing the best resilience (with nearly 40% growth in actual cash sales). Local state-owned and private companies are experiencing significant differences, with the sales of private firms shrinking by more than half. The future for real estate companies is clear: leading central enterprises will leverage their financial and resource advantages to focus on urban renewal and the development of high-quality improvement properties in core cities, while regional private companies will concentrate on local markets, targeting basic and improvement needs with a streamlined approach. In the second half of the year, sales are expected to continue to improve due to the lower base from the same period last year. However, a full recovery will depend on policies supporting quality housing in key cities. Overall, the market remains structurally uneven, with not all regions benefiting equally.
In summary, the real estate market in the first half of 2026 was characterized by hot demand in core cities and weaker performance in non-core areas, stability among central state-owned enterprises, and challenges for private firms. Larger-sized homes and home improvements have been the most popular. The industry is shifting from aggressive expansion to more cautious and focused development strategies. Only those with sufficient funds and a focus on local markets will thrive in the future.