Rigid demand remains the main force driving second-hand housing transactions in Beijing and Shanghai. Can improvement-oriented demand take over the baton?

In the first three quarters of this year, 137,229 second-hand residential units were registered online in Beijing, representing a 5.1% year-on-year increase, hitting the highest transaction volume for the same period since 2022; 191,563 second-hand residential units were registered online in Shanghai, up 15.5% year-on-year. Since the third quarter, the monthly transaction volume has hit a new high for the same period in nearly five consecutive months.

Entering October, the activity of the second-hand housing market has continued. As of October 20, the transaction volumes of second-hand residential properties in Beijing and second-hand commercial housing in Shanghai reached 7,029 units and 14,174 units respectively, up 25.9% and 37.9% year-on-year.

On the whole, the transaction of the second-hand housing market in Beijing and Shanghai remains active, rigid demand is still the main force of transaction, and the improvement demand has seen marginal recovery. However, the price performance of the two cities diverges: the listing price of second-hand housing in Shanghai tends to be stable, while the listing price in Beijing still faces downward pressure. Whether the improvement demand can be continuously released and whether the transaction rebound can further drive the price to stabilize remains to be concerned.

Second-hand housing transactions in Beijing and Shanghai remain active, with diverging price trends

The transaction volume of the second-hand housing market in Beijing and Shanghai continues to rise. In the first three quarters, the transaction volume of second-hand housing in Beijing and Shanghai reached 137,000 units and 192,000 units respectively. Driven by the continuous effect of the demand-side policies in August, the market in Beijing and Shanghai remains active. In September, the second-hand residential transaction volumes in Beijing and Shanghai were 16,000 units and 21,000 units respectively, up 13.7% and 2.0% month-on-month. Shanghai saw a 17.6% year-on-year increase, marking seven consecutive months of year-on-year growth, while Beijing posted a slight 0.5% year-on-year decline.

In terms of prices, according to the 100 Cities Price Index of the China Real Estate Index System, the price of second-hand residential properties in Beijing fell by 5.32% cumulatively in the first three quarters of 2026. The average listing price in Beijing is still on a downward trend, with the decline narrowing in the second quarter and widening somewhat in the third quarter. The overall listing price of second-hand housing in Shanghai has shown an upward trend since March, rising continuously month-on-month from March to July, falling slightly in August, and turning up by 0.11% again in September.

Rigid demand remains the main force of second-hand housing transactions in Beijing and Shanghai, and improvement demand has recovered to some extent

In the first three quarters, the proportion of second-hand housing transactions priced below 2 million yuan in Beijing and Shanghai reached 51.3% and 47.1% respectively, 3.1 and 5.0 percentage points higher than that of the whole last year. From the perspective of floor area segments, the transaction also shows a trend of concentrating on small-sized units. In the first three quarters, the proportion of second-hand housing transactions below 90 square meters in Beijing and Shanghai was 62.5% and 66.6% respectively. The figure for Shanghai was 1.7 percentage points higher than that of the whole last year, while the figure for Beijing was basically the same as last year.

At the same time, since May, the proportion of second-hand housing transactions priced above 3 million yuan and with floor area above 90 square meters in Beijing and Shanghai has increased compared with that in April this year, reflecting that the recent transaction structure has improved and part of the improvement demand is recovering.

In September, the proportion of housing units priced above 3 million yuan in Beijing rose to 30.9% from 20.9% in April, among which the transaction proportions of units priced at 3-5 million yuan, 5-8 million yuan and above 8 million yuan increased by 4.6, 3.4 and 2.1 percentage points respectively. The transaction proportion of high total price housing units in Shanghai is also rebounding, and the proportion of units priced above 3 million yuan has risen to 33.2%, of which the proportion of units priced at 3-5 million yuan has increased to 18.1%, and the proportion of units priced above 5 million yuan has also increased slightly.

Meanwhile, the transaction proportion of second-hand housing units above 90 square meters in Beijing and Shanghai is also gradually increasing. In September, the transaction proportions of second-hand housing units above 90 square meters in Beijing and Shanghai were 38.4% and 34.2% respectively, up 1.6 and 1.8 percentage points compared with April this year.

It is worth noting that on September 29, the Ministry of Finance, together with the People's Bank of China and the State Administration of Financial Regulation, issued the Notice on Implementing the Interest Discount Policy for Residents' Purchasing Housing Loans, implementing the resident housing purchase loan interest discount policy for first homes with a construction area of less than 120 square meters and a total price of less than 1.5 million yuan.

Due to the high total price of new houses in Beijing and Shanghai, the housing units benefiting from the fiscal interest discount policy are mainly some second-hand houses. According to data from the China Index Academy, in the first three quarters of this year, the transaction proportion of second-hand houses with area less than 120 square meters and total price less than 1.5 million yuan in Beijing was 35.0%, and that in Shanghai was 30.4%.

Listing volume continues to decline, and the bargaining space narrows synchronously

Since the beginning of this year, the transaction volume of second-hand housing has continued to rise, and the listing volume of second-hand housing has also maintained a downward trend.

According to the monitoring of the China Index Academy, since the fourth quarter of last year, the listing scale of second-hand housing in Beijing and Shanghai has shown a fluctuating downward trend. At the end of September 2026, the stock of listed second-hand housing units in Beijing was 118,000, down 1.1% month-on-month and 15.7% year-on-year; the stock of listed units in Shanghai was 84,000, down 1.2% month-on-month and 23.8% year-on-year. While the stock listing volume declines, the new listing volume is also gradually stabilizing.

The rebound in second-hand housing transaction volume, coupled with the decline in listing volume, has led to a synchronous narrowing of the bargaining space.

According to the data of leading intermediaries monitored by the China Index Academy, the bargaining space of second-hand housing in Beijing and Shanghai has remained generally stable since the beginning of this year. In September, the bargaining space in Beijing was 6.99% and that in Shanghai was 6.42%, both significantly lower than the highs in September last year.

Overall, the activity of the second-hand housing market in Beijing and Shanghai remained at a high level in the first three quarters of 2026. Rigid demand is still the basic support of transactions, the improvement demand has seen marginal recovery, and the market supply pressure has eased to some extent.

Looking forward to the fourth quarter, the implementation of the resident housing purchase loan interest discount policy is expected to provide certain support for eligible first-home demand, and it is expected that the second-hand housing transactions in Beijing and Shanghai will still maintain a certain level of activity. On the whole, the current market recovery is still mainly driven by rigid demand. The key to price stabilization lies in the continuous release of improvement demand, whether the listing scale can remain stable, and the further recovery of residents' expectations.

This article is from the WeChat Official Account "China Index Academy", written by China Index Academy, and published by 36Kr with authorization.