Homebuyers are starting to "buy whenever they can".

The real estate market in May is experiencing an anti - common - sense situation: The supply of new homes has dropped by nearly half, but sales have remained stable.

In the top 50 key cities across the country, the supply of new homes decreased by 45% month - on - month and 42% year - on - year, and the decline is still expanding. On the other hand, the sales of new homes increased slightly by 2% month - on - month, and only decreased slightly by 2% year - on - year, firmly standing at the level of the "small spring" in March. The second - hand housing market is even more robust. Although the sales of second - hand homes in the top 20 key cities across the country decreased by 12% month - on - month, they increased significantly by 18% year - on - year, and the cumulative increase expanded to 12%.

The combination of these three key data further verifies that the bottom of the real estate market in 2026 is being confirmed, and the wait - and - see sentiment among homebuyers has eased.

01

In May, the supply side of new homes actively "stepped on the brakes": The newly added supply area of new homes in the top 50 key cities was 6.31 million square meters, a 45% decrease month - on - month and a 42% decrease year - on - year, and the decline has expanded. The cumulative supply area in the first five months was 37.09 million square meters, a 27% decrease year - on - year, and the cumulative decline has further narrowed by 7 percentage points.

Among them, the newly added supply scale in third - and fourth - tier cities continued to shrink, with the total scale and decline ranking among the top in cities of all levels.

The supply area in 22 third - and fourth - tier cities was only about 1.23 million square meters, a 47% decrease month - on - month and a 50% decrease year - on - year. The month - on - month and year - on - year declines were the largest among cities of all tiers.

The year - on - year and month - on - month declines in supply in first - tier cities were relatively the smallest, with a 43% decrease both year - on - year and month - on - month. The cumulative supply in the first five months was 5.83 million square meters, a 24% decrease year - on - year. Among them, the supply in Beijing, Guangzhou, and Shenzhen declined comprehensively, and first - tier cities were also actively controlling the volume.

Behind the supply contraction is the fact that the current market inventory is large enough, and the market is digesting the inventory by controlling the incremental supply. At the same time, the logic of real estate developers in launching new projects has also changed: focusing on core cities, core locations, and high - certainty products. This can also be confirmed by the performance of new homes with obvious product - power advantages in core cities under the guidance of "good homes".

Although the supply is decreasing, there are actually more "good homes", which is a very important change in the supply of new homes in May.

Adjustments on the land supply side are also taking place simultaneously. Core cities are starting to offer more land parcels with "low density, livability, and mature supporting facilities" and high certainty. In the first five months of this year, the floor area of residential - related land with a plot ratio of less than 1.5 in first - tier cities has reached 945,000 square meters, a 64% increase year - on - year.

In cities such as Shanghai, Hangzhou, and Suzhou, land supply has also clearly tilted towards low - density and core locations. Take Shanghai as an example: In the first five months, there have been 4 pure residential land parcels with a plot ratio of less than 1.2 in the land auction market. This number is equivalent to the total number of transactions in the past three years. The core is to reduce ineffective supply from the land transfer end while maintaining price expectations.

02

Against the background of a more than 40% shrinkage in the supply of new homes, the sales of new homes increased by 2% month - on - month, and the cumulative decline continued to narrow, releasing positive signals.

Specifically, the sales of new homes in 50 cities reached 13.623 million square meters, a 2% increase month - on - month and a 2% decrease year - on - year. The cumulative sales in the first five months were 55.955 million square meters, a 15% decrease year - on - year, narrowing by 3 percentage points compared with the first four months.

The market in first - tier cities continued to recover and led the way, with sales reaching 2.309 million square meters, a 19% increase month - on - month and a 14% increase year - on - year.

Shenzhen had the largest increase in sales, with year - on - year and month - on - month increases of 65% and 46% respectively. Guangzhou had the highest sales volume, with a sales area of 751,000 square meters, increasing both year - on - year and month - on - month. Among the four first - tier cities, Guangzhou is the only city with a year - on - year increase in cumulative sales in the first five months. Shanghai had a 13% month - on - month increase.

In second - tier cities, only Wuhan, Nanjing, and Kunming had year - on - year and month - on - month increases.

Third - and fourth - tier cities are showing key bottom signals: The sales of new homes increased by 7% month - on - month and 8% year - on - year, and the cumulative decline narrowed to 5%. The sales of new homes in Foshan, Zhongshan, Wuxi, Shantou, Yangzhou, Zhaoqing, Dongguan, Luzhou, Kunshan, etc. increased both year - on - year and month - on - month. With the supply almost halved, the sales volume increased, and the inventory pressure in third - and fourth - tier cities is gradually easing.

03

The popularity of the second - hand housing market is spreading from the sporadic outbreaks in core first - and second - tier cities to more cities.

Among the 20 cities, 5 cities including Shenzhen, Wuhan, Foshan, Dongguan, and Xiamen had year - on - year and month - on - month increases. The month - on - month increases in Wuhan and Xiamen were both over 20%, and 18 cities had year - on - year increases.

An even more positive signal is that among the 20 cities, 16 cities had a year - on - year increase in the cumulative sales of second - hand homes in the first five months. Ningbo achieved a doubling of growth, and the increases in Dalian, Yangzhou, Yantai, and Foshan were all over 20%.

There are two reasons for the continuous increase in second - hand housing sales: First, after the previous price adjustments, the cost - effectiveness of second - hand homes has become prominent. As the prices of "old, small, and shabby" homes have bottomed out first, some wait - and - see customers have started to enter the market. Second, against the background of low down payments and low interest rates, the reduction in second - hand housing transaction costs is also a major driving force.

2026 is a year for confirming the industry bottom. The bottom signals in the sales of first - and second - hand homes in key cities in the first five months are being verified month by month. During the process of bottom confirmation, the market in each city will continue the pattern of "weak recovery and strong differentiation".

In the past six months or even a year, most homebuyers have not disappeared but have been waiting and seeing. With the obvious improvement in the product power of new homes and the stable bottom of second - hand housing prices, the market sentiment has finally loosened - instead of blindly "waiting", people are starting to "buy when they can".

The release of first - and second - hand housing sales in May shows that the housing demand has not disappeared but has been waiting for a definite signal. Now, the signal has come.

This article is from the WeChat public account "Ding Zuyu's Comments on the Real Estate Market". Author: Editorial Department. Republished by 36Kr with permission.