Has the bottom of housing prices appeared?

According to the data released by the National Bureau of Statistics, in August this year, the sales prices of new and second - hand residential properties in first - tier cities continued to decline. Among them, the sales price of new residential properties decreased by 0.1% month - on - month, and the sales price of second - hand residential properties decreased by 1.0% month - on - month.

The decline in second - tier cities is more obvious. The price of new residential properties decreased by 0.3% month - on - month, and the price of second - hand residential properties decreased by 0.6% month - on - month. The decline of second - hand residential property prices in second - tier cities continued to widen.

From February to March this year, the prices of second - hand residential properties in first - tier cities briefly rose, but then due to the pressure from sellers, the prices entered a downward range again. Currently, the prices of second - hand residential properties in Beijing have been falling for 5 consecutive months, those in Shanghai and Guangzhou have been falling for 4 consecutive months, and those in Shenzhen have been falling for 6 consecutive months. Guangzhou, which has the largest decline, has seen a 6.2% year - on - year drop in August compared with last year.

Second - hand residential properties can measure market sentiment more accurately than new residential properties. However, new residential properties have their own advantages: the supply structure can be adjusted more quickly. If properties in the core areas are easy to sell, developers will launch more projects in the core areas. Since the market in first - tier cities is more resilient, developers will turn to first - tier cities to acquire land.

Therefore, there are relatively large differences in the fluctuations between new and second - hand residential properties in statistical data. For example, in Shanghai, due to the large - scale supply of new land plots and projects in the core areas, after the core areas replaced the outer ring as the main area for transactions, the prices of new residential properties in Shanghai have been rising month - on - month for 38 consecutive months. However, the overall price of second - hand residential properties is falling. According to the data in August this year, it has fallen by 2.6% year - on - year.

Data source: National Bureau of Statistics

The prices of new residential properties in first - tier cities are more resilient than those of second - hand residential properties, which is closely related to the supply structure.

Since the new residential property market has stronger "planning" and concentration, while the second - hand residential property market is a market with highly dispersed supply and full competition between buyers and sellers, the long - term trend of the market is determined by the game between supply and demand. It is judged that in the future, the differentiation between new and second - hand residential properties in first - tier cities will intensify, and they will become two independent markets.

The key factors affecting the trend of the new residential property market are land supply, funds of development enterprises, and trading volume.

In terms of land, affected by the widening gap in the strength of real estate enterprises, the concentration of the land market is getting higher and higher. According to the data from CRIC Real Estate Research, from January to August 2025, the concentration of the real estate industry continued to increase. The newly added value of goods of the top 10 real estate enterprises accounted for 70% of the total of the top 100 real estate enterprises, and the market pattern further concentrated towards the leading enterprises.

Taking Beijing as an example, in the first half of 2025, a total of 22 residential land plots were transacted in Beijing, and China State Construction Engineering Corporation and its affiliated companies won 7 plots, accounting for nearly 1/3.

The concentration of new supply towards large real estate enterprises will, on the one hand, bring regional supply monopoly. On the other hand, the investment strategies of large real estate enterprises tend to be the same, and they all prefer to develop high - end products or improved products, leading the new residential property market towards high - end.

The rapid transformation of the supply structure will actually break the continuity of statistical data, causing local distortion in the data of housing prices and trading volume. On the surface, the prices of new residential properties in cities such as Shanghai and Beijing have not decreased much, and even increased. However, the real feelings of market participants in different regions vary greatly.

From this perspective, in the past 4 years, the new residential property market in first - tier cities has experienced the capacity clearance of small real estate enterprises and private real estate enterprises, as well as the structural decline of the suburban market. These two points are important factors contributing to the greater resilience of housing prices in first - tier cities.

After the capacity clearance of real estate enterprises with low credit and low capital strength, the market pressure on the existing enterprises in first - tier cities has significantly decreased.

Data from the National Bureau of Statistics shows that from January to August 2025, the funds available to real estate development enterprises were 6,431.8 billion yuan, a year - on - year decrease of 8%. The decline rate was 12.2 percentage points slower than the same period last year.

Considering that domestic loans are now open to leading central state - owned enterprises, and the newly started floor area of real estate enterprises continued to decline by 19.5% year - on - year (from January to August). In the first 8 months of 2025, the newly started floor area of real estate enterprises was 398.01 million square meters, only 28.4% of the same period 5 years ago, far higher than the decline rate of available funds (45.1%). It is speculated that the capital pressure on mainstream real estate enterprises in key cities has begun to ease. Except for some real estate enterprises with relatively large inventory pressure in the regional market, the overall pressure on enterprises to reduce prices and clear inventory has been relieved.

The latest analysis report from CSC Financial stated that real estate enterprises are actively replenishing their land reserves in core cities, the land market is warming up, and the bottoming - out process of the new residential property sales scale is coming to an end. Since the beginning of this year, the sales volume and price of commercial residential properties have still been adjusting, but the land market has stabilized first. In the first 8 months, the total land acquisition amount of the top 100 real estate enterprises reached 723.5 billion yuan, a year - on - year increase of 31%. The overall investment intensity was 32.5%, an increase of 6.8 percentage points compared with the whole of last year. The performance of high - quality real estate enterprises has stabilized first, and the confidence of real estate enterprises in land acquisition has been significantly enhanced.

Zhang Bo, the dean of the 58 Anjuke Research Institute, believes that in August, the national real estate market continued the trend of differentiated adjustment. The decline rate of new residential property prices in first - tier cities has shown signs of narrowing. This stabilization signal is closely related to the continuous implementation of policies, especially the successive relaxation of peripheral purchase restrictions and the reduction of mortgage interest rates in first - tier cities. However, in third - tier cities, there is an oversupply, large inventory pressure, and limited self - adjustment ability of the market.

However, the trend of the second - hand residential property market is different. The trading volume has shown signs of stabilization, but the price has continued to decline.

In the second - hand residential property market, both the supply and demand sides are mainly individuals, so the game is more intense, and the downward inertia of prices is greater.

Due to the negative effect of assets, individual buyers are afraid of overpaying and tend to choose the lowest price for transactions. The decentralized supply mainly composed of individual housing sources will also intensify the price - comparison effect and is more likely to cause a rush.

Meanwhile, the de - leveraging process of leading real estate enterprises is almost over, but there are no signs of a slowdown in the de - leveraging process of individual residents. According to the data released by the central bank, in the first 8 months of this year, the increase in RMB loans was 13.46 trillion yuan. Among them, the increase in loans to enterprises and institutions was 12.22 trillion yuan, and the increase in medium - and long - term loans to households (mortgage loans) was 1.08 trillion yuan. Among the newly added loans, enterprises and institutions accounted for 90.78%, and individual housing loans only accounted for 8.02%.

In the first half of this year, the total individual housing loans of the six major state - owned commercial banks decreased by 107.833 billion yuan.

Considering that the down - payment ratio for mortgage loans has now dropped to the lowest level since 2008, and individuals can use a higher proportion of loans for house - buying, it shows that the actual willingness of the society to buy houses has decreased more than the decline reflected in the loan data.

The increase in the housing price - to - rent ratio will stimulate the willingness of individual homebuyers to enter the market. However, recently, the rental prices in cities such as Beijing have also shown obvious signs of decline, which will also delay the house - buying plans of some people.

Trend of the monthly rent index for whole - house rentals in Beijing's housing rental market. Data source: 58 Anjuke

Recently, a report from Goldman Sachs predicted that if the real estate market is to stop falling and stabilize, an additional 210 million square meters of houses need to be sold in 2026. According to the relaxation of mortgage policies (such as reducing interest rates and extending repayment terms), the total housing purchase subsidies required to fill the new sales in first - and second - tier cities may reach 200 billion - 600 billion yuan. Mortgage policies need to be further relaxed.

Another view from Goldman Sachs, which is different from many people's intuitive impression, is that Chinese households still have room to increase the total/net amount of new mortgage loans by more than 50 trillion to 20 trillion yuan, which is sufficient to support new residential property sales of 65 trillion yuan.

That is to say, individuals still actually have room to increase leverage in house - buying. However, in first - tier cities, 55% of households with local household registration have a housing supply ratio of about 1.5 times, while 45% of non - local household registration households only have a housing supply ratio of 0.1 times. These imbalanced factors have restricted the recovery of the real estate market.

Note: The content of the Goldman Sachs report in this article is translated from "finn's research records".