China’s property market is still declining, but the latest data suggest that the pace of deterioration may be slowing. The September 2026 China property market outlook shows some improvement in housing inventory and second-hand transactions, although new-home prices, sales and construction activity remain weak.
China Home Prices Are Still Under Pressure
Housing prices remain the clearest reason why it is too early to call a bottom.
In August 2026, only 21 of the 70 cities tracked by China’s National Bureau of Statistics (NBS) recorded flat or rising new-home prices, down from 23 cities in July.
First-tier new-home prices rose just 0.1% month on month. However, second-tier prices fell 0.1%, while third-tier prices declined 0.2%.
Shanghai remained the strongest major city, with new-home prices rising 3.0% year on year. In contrast, prices in Beijing, Guangzhou and Shenzhen were still lower than a year earlier.
Source: National Bureau of Statistics, 15 September 2026.
Property Sales and Investment Remain Weak
The broader activity data continue to show significant weakness.
During January to August 2026:
- Property sales by floor area fell 12.1% year on year.
- Real estate development investment declined 19.9%.
- New construction starts fell 24.8%.
- Property completions declined 23.7%.
Importantly, all four indicators deteriorated compared with the January-July readings.
This suggests that developers remain cautious and that the recovery in housing demand has not yet been strong enough to restart construction activity.
Source: National Bureau of Statistics, September 2026.
Housing Inventory Is Starting to Improve
The clearest positive development is housing inventory.
Completed property available for sale fell 1.1% year on year in August, compared with a decline of 0.8% in July.
This means housing inventory is now shrinking rather than increasing, an important step towards restoring balance between supply and demand.
Second-hand housing activity also remains relatively resilient. Transaction area rose 10.6% year on year during January-August 2026.
Source: NBS and Ministry of Housing and Urban-Rural Development, September 2026.
Vanke Remains a Key Property Market Risk
Developer stress has not disappeared.
China Vanke has avoided a formal default, but Reuters reported on 22 September 2026 that regulators had asked banks to extend repayment terms and avoid immediately classifying some overdue Vanke loans as non-performing.
This suggests that financial support remains necessary to prevent stress at major developers from spreading through the wider property and banking system.
Has China’s Property Market Reached a Bottom?
Not yet.
There are encouraging signs: housing inventory is falling and second-hand transactions remain stronger than the new-home market.
However, a convincing property market recovery would require broader price stability, stronger new-home sales and an improvement in construction and property investment.
For now, the most accurate description is that China’s housing downturn is decelerating, but the market has not yet reached a clear and sustainable bottom.
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