People's Daily: Second-hand home sales surpass new homes, signaling shift to stock phase, not industry decline

Source: People's Daily | Author: Dean of Guanghua School of Management, Peking University

On September 20, People's Daily published an article titled "Real Estate Enters Stock Phase, Not a Sign of Industry Decline."

On September 18, the Ministry of Housing and Urban-Rural Development stated at a press conference held by the State Council Information Office that China's real estate market has entered a stock phase. Currently, the share of second-hand housing transactions has risen from 27% in 2020 to 46% in 2025, and reached 52% in the first eight months of 2026, surpassing new homes as the dominant force in the housing transaction market. This shift is the most direct market evidence of the transition in the real estate development stage.

This transformation is not sudden but an inevitable outcome in line with the laws of economic development.

• From the supply side: The per capita floor area of urban housing in China has exceeded 40 square meters, and the average number of housing units per household is over 1.1. The basic issue of "having a place to live" for the people has been largely resolved.
• From the demand side: China's urbanization rate is approaching 67%. Urban development is shifting from large-scale incremental expansion to stock quality improvement. The dominant trend in residential transactions is now improvement-driven replacement demand, such as "selling old to buy new" and "trading up from smaller to larger homes."

From "Incremental" to "Stock": A Return to the Core Purpose of Development

For a long period in the past, the investment attribute of real estate was continuously amplified. In the stock phase, the core contradiction of the industry has shifted from insufficient total supply to structural supply shortages. Residents' needs have evolved from "having a home" to "having a good home," with increasingly prominent demands for housing quality, community environment, and refined property services. The value of real estate development must ultimately return to the fundamental public welfare attribute of "housing."

Housing Returning to Public Welfare: First, Secure the Bottom Line

In the stock phase, policies should coordinate multiple objectives, including risk prevention, transformation promotion, and public welfare enhancement.

• For the industry: The construction of a new real estate development model should be accelerated to form a more sustainable development pattern.
• For economic development: The contribution of real estate to the macroeconomy will shift from being primarily incremental to focusing on stock improvement. Urban renewal projects—such as the renovation of urban villages, dilapidated and dangerous housing, and old residential communities—will become important drivers of stable investment.
• For ordinary residents: This means substantial improvements in living experience, ensuring that everyone striving in the city can find a secure place to call home.

Housing Returning to Public Welfare: The Key Is Improving Quality

In recent years, the Ministry of Housing and Urban-Rural Development has vigorously promoted the construction of "good housing." The new edition of the Residential Project Specification has introduced multiple requirements for improving housing quality. This updated specification will not only guide the development of new housing but also provide clear standards for the renovation and upgrading of existing housing stock.

Housing Returning to Public Welfare: Ultimately, It Must Deliver Tangible Improvements in Living Experience

In the first eight months of this year, the sales area of new commercial housing in China decreased by 12.1% year-on-year, while the net transaction area of second-hand housing increased by 10.6% year-on-year. This decline in one area and growth in another does not indicate a shrinking market demand, but rather a "gear shift" in demand structure: more and more people are no longer chasing price fluctuations for speculative gains. Instead, through rational replacement, they are shifting the meaning of housing from an investment asset to a more suitable living space. Behind this is the choice of the people—they care more about whether their homes can provide greater comfort and peace of mind.

When the value anchor of a home shifts from "will it rise in price?" to "is it a good place to live?" the real estate industry can truly resonate with the people's aspirations for a better life, paving a more solid and sustainable path forward.