Summary of Key Points
This news article highlights the analysis by real estate expert Ding Zuyu regarding the housing market in the first half of the year. He believes that China's real estate sector is in a phase of "bottom confirmation"—although there have been no significant regulatory policies, there are already positive changes in the transaction side (with outstanding performance in the second-hand housing and high-end new housing markets), and the land market has begun to recover. The future housing market is expected to enter a stage of "structural development," with increased urban differentiation, and it may take until 2026 for the bottom to be officially confirmed.
I. The Second-Hand Housing Market as a Barometer of Market Stability
The second-hand housing market provides the best indication of real demand (since new housing is heavily influenced by developer supply, while second-hand housing represents actual transactions between sellers and buyers). In the first half of the year, sales of second-hand homes in key cities across the country increased by 13% year-on-year, reaching a four-year high. Particularly impressive figures include Beijing with 93,600 units sold (the highest in five years), Shanghai with 147,000 units (nearly reaching the historical peak of 2021), and Shenzhen with 35,000 units.
More importantly, there have been changes in prices and market structure: prices in second-hand homes in core cities stopped falling, and the overall transaction value has also increased. In Beijing and Shanghai, prices continued to rise throughout the first half of the year, while in Guangzhou and Shenzhen, they began to recover in the second quarter, indicating that demand for better-quality housing (e.g., larger or more luxurious homes) is emerging.
II. The New Housing Market Showing Signs of Stability, with High-End Properties Playing a Key Role
Although new housing sales still decreased by 11% year-on-year, the decline has narrowed compared to previous periods, and there was a 41% increase quarter-on-quarter in the second quarter, indicating stability. Demand for high-end properties is particularly strong, with sales of residences priced over 30 million yuan increasing by 29% year-on-year, especially in cities like Hangzhou, Shenzhen, and Xiamen.
The reason for this is that many cities launched high-quality housing projects in the first half of the year, meeting the needs of buyers looking to upgrade their homes. People are no longer interested in ordinary properties and are willing to pay more for locations and quality.
III. The Land Market Heating Up, with Real Estate Companies Focusing on Prime Locations
Land is the foundation of the real estate industry. In July this year, real estate companies spent 49% more on land acquisitions year-on-year, with the top ten companies making even more significant investments. For example, Poly Real Estate invested 29.3 billion yuan in land acquisitions in July, a more than 28-fold increase from the same period last year. However, real estate companies are no longer acquiring land indiscriminately; they are focusing on core cities and areas (such as city centers and near high-quality schools) as well as scarce resources (e.g., properties with river or lake views). This reflects a shift in their strategy: from "scale expansion" (acquiring large amounts of land to build many houses) to "quality priority" (only acquiring land that can be sold and generate profits), given the current market conditions.
IV. The Future Housing Market: Increased Differentiation, with Bottom Confirmation Expected by 2026
Ding Zuyu predicts that the market trend for the second half of the year will be as follows: July and August are traditionally slow seasons, so sales may decline slightly, but there could be a temporary rebound during the "Golden September and Silver October" period, followed by stability by the end of the year. More importantly, the future housing market will show increasing differentiation—some cities (especially core first- and second-tier ones) will experience steady growth, while others (third- and fourth-tier cities) may continue to adjust.
He also notes that the market is moving from an era of overall growth to a stage of structural development. To understand the market, it is essential to consider specific cities, demand structures (e.g., the growing proportion of demand for better-quality housing), and the upgrading of housing consumption. The complete confirmation of the real estate market's bottom may not occur until 2026.
V. Why Is It Said That "Bottom Confirmation Is in Progress?"
Simply put, the market is transitioning from a period of decline and adjustment to a new state of balance: transactions are increasing, prices have stopped falling, and real estate companies are becoming more rational in their investments. However, the market has not yet reached its lowest point, as differentiation continues, and some cities and regions are still unstable. Therefore, we are currently in a process of confirmation, which will take time (until 2026) to finalize.
In summary, the real estate sector is not experiencing a "crash" but is adjusting to find a new balance. When buying property in the future, it will be more important to consider factors such as city location and quality, rather than making decisions based on past practices.