According to data released by the Passenger Car Association's Secretary-General, Cui Dongshu, the national commercial housing market remained in a deep adjustment cycle during January-July 2026, with both sales area and sales value registering double-digit year-on-year declines. However, the pace of decline has been steadily narrowing since March, while price levels are showing early signs of month-by-month stabilization.

The core challenge has shifted from "price declines" to "volume contraction," with extreme regional and city-level divergence. First-tier cities and core metropolitan areas demonstrate relatively strong price and volume resilience, whereas central and western provinces experiencing population outflows have seen volume drops exceeding 60%. Policy support measures are beginning to show marginal effects, yet a full industry recovery still awaits substantial improvements in inventory digestion, household income expectations, and demographic fundamentals.

National New Home Price Trends

Nationwide average new home prices exhibit a long-cycle pattern of "rising first, then falling, with a high-level retreat." The 2016-2021 period marked sustained growth, with annual averages climbing from RMB 7,476 to RMB 10,139 per square meter, a cumulative increase of 35.6%, peaking in 2021. From 2022 onward, prices entered a downward channel, with a brief rebound to RMB 10,437 in 2023 before weakening again. Annual averages for 2024-2026 stood at RMB 9,885, RMB 9,527, and RMB 9,489 respectively. Looking at cumulative January-July averages, the 2021 peak reached approximately RMB 10,653, declining to RMB 9,488 by 2026, a cumulative drop of about 10.9%. Within 2026, a "low-start, high-finish" monthly recovery pattern emerged, with prices rising from RMB 8,871 in February to RMB 9,780 in July, showing consecutive month-on-month gains—an early sign of price stabilization under policy support, though absolute levels remain significantly below historical peaks.

Commercial Housing Sales Performance

During January-July, newly built commercial housing sales area totaled 450.21 million square meters, down 11.8% year-on-year, with residential sales area declining 12.7%. New commercial housing sales value reached RMB 4.2718 trillion, down 13.1%, including a 13.2% drop in residential sales value. Since 2025, the market has followed a trajectory of "dual declines in volume and value, with the contraction widening before narrowing." The cumulative sales area growth rate slid from a 4.0% decline in January-July 2025 to a trough of 13.5% in January-February 2026, before gradually improving to an 11.8% decline by July. The sales value trajectory was steeper, plunging from a 6.5% decline to 20.2% in early 2026, then recovering to 13.1%. A persistent "scissor gap" has emerged—sales value declines consistently exceed sales area declines, reflecting the additional drag from falling average prices. Since March 2026, the narrowing decline indicates that policy combinations such as trade-in programs and reduced down payments are providing marginal support. However, double-digit negative growth through July confirms the market has yet to exit its adjustment phase, and volume recovery will require more time.

Historical Sales Volume Analysis

The real estate sector is undergoing a structural inflection across its ten-year cycle. Sales area has fallen from the 2021 peak of 1.79 billion square meters to 880 million in 2025, with January-July 2026 reaching only 450 million—a halving from peak levels. Sales value dropped from RMB 18.2 trillion to RMB 8.4 trillion, with January-July 2026 at RMB 4.3 trillion. Unsold housing inventory has paradoxically climbed from 500 million square meters in 2020 to 760 million in 2026, with deleveraging pressure continuously building. Land transfer fee revenue reached RMB 870.51 billion in 2021, accounting for 48% of real estate sales; by 2023 it was RMB 579.96 billion (50% of sales), and in 2024 it stood at RMB 486.99 billion (50% of sales), underscoring the sector's massive contribution to local fiscal revenues. In 2025, land sales revenue still represented 49% of housing sales value. Currently, the January-July 2026 ratio of auto sales to real estate sales stands at 30 square meters of housing per vehicle, indicating some improvement in this previously distorted comparison. While this marks progress from the 2020 peak ratio of 70 square meters per vehicle, the lingering debt burdens from earlier periods and the consumption squeeze from average prices around RMB 10,000 per square meter continue to weigh heavily on the auto market, keeping demand subdued due to debt pressure. The wealth effect from the property market does provide some boost to premium vehicle demand; recent declines in household property debt pressure and reduced home-buying demand may offer potential tailwinds for improving auto market consumption.

Sales Volume Variations Across Regions

Regional divergence is the defining characteristic of this adjustment cycle. National commercial housing sales area for January-July fell from the 2021 peak of 1.016 billion square meters to 450 million in 2026, an overall decline of 56%. By region, eastern municipalities proved most resilient, with only an 11% drop from peak levels and a 2026 position ratio of 54%, reflecting strong demand from first-time buyers and upgrade needs in core cities. The Northwest (-39%) and East-North China (-41%) followed. The steepest declines occurred in the Southwest (-64%), Central-Yangtze (-61%), East-South China (-61%), and East-East China (-60%), regions that previously relied on high-turnover, high-leverage development models and are now experiencing concentrated deleveraging pressure. The Northeast (-59%) and Central-Yellow River (-52%) also underwent deep corrections. Overall, core metropolitan areas with population inflows and regions with strong industrial support have proven relatively resilient, while central and western areas with population outflows and high inventory levels lead the declines. This regional divergence is expected to persist over the long term.

Provincial Average Price Variations in 2026

Provincial average prices show a pattern of "deep corrections at high levels, stabilization at low levels, and isolated strength." Among first-tier cities, Shanghai's January-July 2026 average price of RMB 31,125 represents a 30% decline from its 2023 peak of RMB 44,229. Beijing's RMB 30,225 is down 28% from its 2021 peak of RMB 41,868, with first-tier city price adjustments exceeding expectations. Among eastern coastal provinces, Zhejiang (-24%), Jiangsu (-26%), and Chongqing (-28%) experienced deeper declines. Guangdong proved the most resilient, with a 2026 average price of RMB 15,996, just 1% below its peak and a position ratio of 91%, benefiting from Pearl River Delta industrial and demographic support. Hainan (-10%), Tianjin (-8%), and Fujian (-9%) showed relative resilience. Among central and western provinces, Xinjiang's 2026 average price of RMB 6,100 set a new historical high (position ratio 100%), while Gansu (-2%) and Ningxia (-2%) remained near peak levels, demonstrating price resilience in low-base regions. However, most provinces including Sichuan, Yunnan, Henan, Heilongjiang, Guizhou, and Guangxi saw 2026 average prices at their lowest levels since 2020 (position ratio 0%), indicating sustained downward price pressure.

Sharp Divergence in Provincial Sales Area for 2026

Provincial sales area divergence far exceeds price divergence, revealing an extreme pattern of "resilient core cities versus deeply declining central and western provinces." Beijing's January-July 2026 sales of 6.09 million square meters were nearly flat against its 2023 peak of 6.12 million (position ratio 99%), making it the nation's most resilient province. Shanghai's 9.43 million square meters declined just 3% from peak (position ratio 81%), while Hainan's 4.64 million fell 13% (position ratio 67%). These three regions benefit from strict supply controls and robust essential demand, giving them outstanding market resilience. Tianjin (-27%), Hubei (-33%), and Hebei (-35%) showed relatively manageable declines. By contrast, the vast majority of central, western, and northeastern provinces recorded 2026 sales area at their lowest levels since 2020 (position ratio 0%). Anhui suffered the deepest decline, plunging 75% from its 2021 peak of 63.73 million square meters to 15.78 million. Guangxi (-71%), Chongqing (-69%), Fujian (-67%), Jiangxi (-65%), and Liaoning (-65%) followed closely. This demonstrates that the current adjustment has evolved from "price correction" to "volume collapse," with demand contraction in third- and fourth-tier cities and below serving as the core challenge. Market recovery will depend heavily on fundamental support from population and industrial dynamics.