CRIC Research reports that the real estate market entered its traditional seasonal slowdown in July 2026, showing a clear pattern of "new home sales declining in the off-season while second-hand homes remain resilient." Supply and demand for new homes in key cities fell month-on-month, with market heat significantly lower than the mid-year push in June. Meanwhile, the second-hand market maintained high activity levels, supported by replacement demand and price reductions, with year-on-year growth continuing. August is expected to see further month-on-month declines in new home supply and sales, while the second-hand market is likely to remain high but with a slight month-on-month decrease.

Overall Summary: Seasonal Decline in New Homes, Second-Hand Homes Hold Nearly 70% Share

In July 2026, total housing sales (new and second-hand) in 13 key cities reached approximately 18.88 million square meters, down 11.56% month-on-month but up 7.03% year-on-year. New home sales totaled 5.67 million square meters, a 22.74% month-on-month drop and a slight 1.76% year-on-year increase. Second-hand home sales reached 13.21 million square meters, down 5.7% month-on-month but up 9.47% year-on-year, showing a much stronger recovery than new homes. The share of second-hand homes in total sales rose to 69.97%, up 4.35 percentage points from June, solidifying its dominant role, while new homes accounted for only 30.03%, reflecting a continued shift in demand toward the existing home market.

New Home Market: Supply Falls Over 30% Month-on-Month, Sales Decline Narrows to 1.6%

In July, supply and sales of new homes in 15 key cities both declined, with supply dropping more sharply. New supply was 3.70 million square meters, down 35.95% month-on-month and 27.32% year-on-year. Sales were 6.03 million square meters, down 22.51% month-on-month and 1.63% year-on-year. The supply-to-sales ratio fell to 0.61 from 0.74 in June, slowing inventory accumulation. The supply drop was due to the traditional off-season and developers' cautious approach amid sales pressure and tight financing. From January to July, cumulative supply fell about 23.40% year-on-year. The year-on-year decline in sales narrowed to 1.63%, indicating a bottoming-out trend. The average sales price was 29,365 yuan per square meter, down 3.21% month-on-month but up 7.64% year-on-year, driven by high-quality project registrations in first-tier cities and strong second-tier cities like Hangzhou.

City-level performance showed clear regional divergence. The top three cities by sales volume were all in central and western China: Chengdu (771,600 sqm), Chongqing (649,300 sqm), and Xi'an (583,800 sqm), together accounting for about 33% of the total 15-city sales. Guangzhou (526,500 sqm) and Tianjin (501,500 sqm) followed. Year-on-year, Suzhou led with an 83.13% increase, followed by Shenzhen and Nanjing with over 30% growth. Changsha saw a 51.66% decline. Month-on-month, only Chengdu (13.17%), Xi'an (5.58%), and Hefei (45.56%) grew, while Hangzhou (-50.16%), Shanghai (-47.15%), Changsha (-41.44%), and Wuhan (-38.99%) saw significant drops. In terms of price, Beijing (54,661 yuan/sqm), Shanghai (82,413 yuan/sqm), and Shenzhen (69,932 yuan/sqm) formed the top tier, with Shanghai showing a structural price increase of 13.13% month-on-month. Hefei, Chengdu, and Xi'an showed stable prices with higher volumes, indicating "price-for-volume" strategies.

Sales structure showed marginal changes, with the share of homes under 90 sqm rising to 19.03%, while 90-110 sqm held steady at 25.68%, and 110-130 sqm fell to 24.85%. The 130-150 sqm segment rose slightly to 17.56%, while homes over 150 sqm dropped to 12.87%. Over the longer term, the 90-130 sqm range remains the core, accounting for about 50.5% of sales, up 0.95 percentage points year-on-year. The share of homes under 90 sqm fell 2.36 percentage points, indicating a shift from first-time to improvement demand, with the "size center" moving upward.

By city, Shenzhen had the highest share of homes under 90 sqm at 44.0%, while Guangzhou and Beijing had 37.7% and 25.0%, respectively, reflecting the dominance of small units in high-price cities. Shanghai's main segment was 90-110 sqm at 40.0%. In strong second-tier cities, Hangzhou and Suzhou had high shares of homes over 150 sqm at 31.4% and 30.1%, respectively, driven by high-end improvement demand. Xi'an showed a preference for larger homes, with over 50% of sales in the 130-150 sqm and over 150 sqm segments. Changsha had the highest share of 130-150 sqm homes at 42.6%, linked to its low home prices.

Inventory in 15 key cities fell 4.12% month-on-month to 14.87 million square meters, with the de-stocking period dropping to 22.3 months from 23.2 months in June. City-level divergence was significant. Chongqing (8.0 months), Hangzhou (10.2 months), and Hefei (12.9 months) were below the 18-month warning line, while Beijing, Chengdu, and Foshan had de-stocking periods over 30 months, indicating high inventory risk. Chengdu, despite being the top sales city, had the largest inventory at 23.38 million square meters and a de-stocking period of 32.1 months, reflecting a "high sales, high inventory" dynamic.

Project-level data showed that the top 10 by sales area were dominated by first-time homebuyer projects in core cities, with Chengdu leading with three projects. The top 10 by sales value were all high-end projects in core cities, with Shenzhen, Shanghai, and Hangzhou accounting for all 10, led by state-owned enterprises like China Resources Land, China Overseas Land, and Greentown China. The average price of all top-10 value projects exceeded 100,000 yuan per square meter, highlighting the independent trend of the high-end market.

Second-Hand Home Market: Sales Down 5.7% Month-on-Month, Up 9.47% Year-on-Year

In July, second-hand home sales in 13 key cities totaled 13.21 million square meters, down 5.70% month-on-month but up 9.47% year-on-year, maintaining positive growth for the fourth consecutive month. Sales have remained in the 13-16 million square meter range since March, roughly twice the volume of new home sales, showing stronger resilience. The relative strength of the second-hand market is driven by more significant price adjustments and the activation of the "sell one, buy one" replacement chain.

By city, Shanghai led with 1.75 million square meters in sales, followed by Chengdu with 1.71 million square meters. Beijing, Tianjin, and Chongqing each had sales over 1 million square meters. Year-on-year, 12 of 13 cities saw growth, with Suzhou leading at 36.35%, followed by Foshan (21.02%), Shanghai (19.62%), Tianjin (15.67%), and Wuhan (11.95%). Month-on-month, only Guangzhou (1.46%) and Foshan (15.24%) grew, while the other 11 cities saw slight declines, mostly in single digits. Hangzhou was the only city with both year-on-year and month-on-month declines, down 8.61% and 4.02%, respectively, due to a natural correction after earlier demand release.

Outlook: Off-Season Effect to Continue, August New Home Sales Decline May Narrow Further

In August, the new home market is expected to remain in its traditional off-season, with supply and sales likely to continue declining month-on-month. The second-hand market will stay supported by replacement demand but may see a slight month-on-month decline. The "strong second-hand, weak new home" pattern is unlikely to change in the short term, with the replacement chain providing ongoing support for the new home improvement market.

Supply-side contraction is expected to continue as developers remain cautious. Sales may continue to operate at low levels in August due to the off-season, but the year-on-year decline could narrow further or even turn positive, given the low base in August 2025. City-level divergence will deepen, with first-tier and high-tier cities showing relative resilience. The second-hand market will remain resilient, but year-on-year growth may narrow to 5-8% in August, though it will still significantly outperform the new home market.