Important changes in the real estate market in the first quarter: some leading property developers and institutions say the industry's toughest period has passed.

In the first quarter of this year, the real estate market saw an important shift.

In the 2026 Government Work Report, the description of the real estate targets was adjusted from 2025’s “continuously making efforts to stabilize the real estate market and bring it back to stability after a downturn” to “making efforts to stabilize the real estate market.”

Meanwhile, departments including the Ministry of Housing and Urban-Rural Development, the National Financial Regulatory Administration, and the Ministry of Finance have spoken out frequently. The city real estate financing coordination mechanism has been operating on a normalized basis. Efforts to use special-purpose government bonds to acquire and store existing land and commercial/residential properties have been further intensified, and supporting policies for urban renewal are rolling out faster.

On January 15, 2026, the National Financial Regulatory Administration pointed out at the 2026 regulatory work meeting that it would promote the normalized operation of the city real estate financing coordination mechanism. On March 17, the Ministry of Finance mentioned in the 《2025 China Fiscal Policy Implementation Report》 that it would implement the policies to support special-purpose government bonds for acquiring existing commercial/residential properties to be used as affordable housing, among others.

Based on this, some leading real estate developers and institutions believe that the industry’s most difficult period has already passed, and it will enter a cycle of bottoming out followed by a recovery, with deep and differentiated outcomes. Core cities and high-quality segments are expected to initiate the recovery first.

“Real estate policies have basically been fully rolled out. Next is to conduct a gap check and see whether there are any ‘last-mile’ problems in the implementation of the earlier policies.” On March 31, Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, told a reporter from 《The Economic Daily》 that the most effective real estate market policy at present is to focus on economic fundamentals such as new-type urbanization, local settlement for new urban residents, and stabilizing employment for residents.

Special-purpose government bonds become an important tool

In the first quarter of 2026, the real estate financing environment remained steadily loose, and the city real estate financing coordination mechanism officially entered a normalized operation stage. On January 15, at the annual regulatory work meeting, the National Financial Regulatory Administration clearly stated that it would promote the normalized operation of this mechanism and help build a new model for real estate development.

On January 21, Ni Hong, Minister of Housing and Urban-Rural Development, said in an interview with media reporters that this year would focus on stabilizing the real estate market, give full play to the role of the real estate financing “white list” system, support real estate enterprises’ reasonable financing needs, and implement the system of designated lead banks for real estate financing.

On March 16, at an expanded meeting of the party committee of the National Financial Regulatory Administration, it further proposed the need to play the role of the “guaranteed delivery of completed homes” white list system and speed up the establishment of a financing system that is compatible with the new model of real estate development.

“Normalization of the white list system is an important improvement to the real estate financing coordination mechanism.” Liu Shui, head of the Enterprise and Institution Research Division at the China Index Academy, said that this mechanism will effectively enhance financial institutions’ confidence in real estate enterprises, and also indicates that the “white list” support policy for real estate enterprises is shifting from short-term liquidity relief to long-term protection.

In terms of risk prevention, special-purpose government bonds have become an important tool for destocking and risk resolution. The 《2025 China Fiscal Policy Implementation Report》 released by the Ministry of Finance on March 17 proposed that in 2026, the country would steadily promote urban renewal. Implement the policies to support special-purpose government bonds for acquiring existing commercial/residential properties to be used as affordable housing, among others. Implement and improve regional fiscal policies to enhance regional development coordination.

Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute, analyzed that using special-purpose government bonds to acquire and store existing land and commercial/residential properties achieves one thing with three benefits. It opens up a mass destocking channel for real estate enterprises and alleviates liquidity pressure. It also replenishes affordable housing sources at a low cost. In addition, it can optimize market supply and demand relations and stabilize expectations.

Another important move on the financing side is the optimization of policies for mortgage loans for commercial properties. At the beginning of 2026, the People’s Bank of China and the National Financial Regulatory Administration reduced, nationwide, the down payment ratio for mortgage loans for commercial properties to 30%. Cities such as Shanghai and Guangdong quickly followed with implementation. Beijing and Qinghai further emphasized revitalizing idle commercial facilities: Beijing allows conversion among land use purposes such as commercial, business/finance, and entertainment/sports/health; Qinghai revitalizes existing commercial facilities through building function conversion and mixed-use approaches, providing more paths for destocking inventories of business/commercial properties.

The China Index Academy pointed out that the People’s Bank of China increasing support for business/commercial properties is a concrete reflection of supporting destocking in the business/commercial market, and it shows that regulatory authorities’ attention to destocking business/commercial projects is increasing. In recent years, many cities have already introduced multiple supportive policies, including converting existing business/commercial projects into rental housing, supporting building compatibility, and temporarily changing use.

“The bottom of the real estate market is becoming clearer”

A reporter from 《The Economic Daily》 noted that in the first quarter of 2026, there was an important shift in real estate market policies—more focus on revitalizing existing stock.

This shift was clearly reflected in the National Two Sessions and the “15th Five-Year Plan” outline. This year’s Government Work Report changed the real estate policy target from 2025’s “continuously making efforts to stabilize the real estate market and bring it back to stability after a downturn” to “making efforts to stabilize the real estate market,” and for the first time proposed a three-in-one approach: “city-specific policies to control incremental additions, destocking, and optimizing supply.” After 10 years, it once again emphasized “destocking.”

The “15th Five-Year Plan” outline lists “promoting high-quality development of the real estate sector” as a separate chapter, divided into two subsections: “improving the housing security system” and “promoting steady and healthy development of the real estate market,” adding multiple actionable measures.

For revitalizing existing stock, regions have seen unprecedented efforts in acquiring and storing existing land.

According to incomplete statistics from the China Index Academy, as of March 29, cities nationwide had publicized more than 5,800 parcels of idle land to be acquired using special-purpose government bonds, with a total land area exceeding 300 million square meters and a total value exceeding RMB 780 billion. Over RMB 350 billion of special-purpose government bonds has already been issued, accounting for about 45%. Among them, in 2026, Guangdong, Jiangsu, Sichuan, and other places issued over RMB 48 billion, maintaining a relatively strong pace of issuance.

Another highlight in the first quarter of 2026 is the accelerated rollout of supporting policies for urban renewal.

On February 1, the Fujian Department of Housing and Urban-Rural Development issued the 《Several Opinions on Further Promoting the Stability of the Real Estate Market》 (Minjianfang〔2026〕 No. 1), clarifying support for “self-demolition and self-construction” of old and dilapidated housing.

On February 27, Shenzhen issued a notice clarifying that for newly launched old-community renovation projects, it will generally no longer require the forced construction of affordable housing, lowering the development threshold for enterprises.

On March 5, Qinghai issued the 《Implementation Plan for the Urban Renewal Action in Qinghai Province》, clarifying targets to implement the renewal and renovation of 8 or more old neighborhoods by 2030, complete renovations for 150,000 households, and fully eliminate Category D unsafe housing.

Demand-side policies are becoming more fine-tuned. This year’s Government Work Report proposed “strengthening housing security for early-marriage and early-childbearing families, and supporting housing improvement needs for families with multiple children,” tightly integrating housing policy with population policy. Many regions have optimized their housing provident fund policies—expanding the scope of use, supporting cross-region recognition and mutual lending—and increased housing subsidy support for specific groups.

On March 30, during interviews with media reporters including a 《The Economic Daily》 reporter, the management of China Resources Land stated that the most difficult period for the industry has already passed, and it has officially entered a period of building the base and rebounding, along with a cycle of deep differentiation. From the policy perspective, the current policy intensity is “relatively moderate,” and there is still substantial room for further efforts in the future.

In a research report, Huatai Securities stated, “The bottom of the real estate market is gradually becoming clear.” Its core argument is that second-hand housing is seeing the strongest “small spring” in three years, and the industry is entering a stage of probing the bottom and stabilizing.

Cao Jingjing, general manager of the Index Research Department at the China Index Academy, said that “city-specific policies” remain the main policy line at present. She expects housing policies to better integrate with population policies, strengthening support for early-marriage and early-childbearing families and multi-child families’ housing needs. “In the first quarter of 2026, the real estate market in core cities has shown a pattern-like recovery, with the second-hand housing market performing better than the new home market. In the second quarter, it is expected that the recovery will continue, driven by peak-season demand and good homes entering the market. For the full year, the market is still in a base-building period,” Cao said.