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.

This year’s first quarter saw an important shift in the real estate market.

In the 2026 government work report, the description of targets for real estate work was adjusted from last year’s “continue to exert efforts to stabilize the real estate market and bring it back to steadiness” to “focus on stabilizing 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 regular basis. Efforts to use special bond proceeds to acquire and store existing land reserves and inventory housing have been intensified, and supporting policies for urban renewal have been rolling out faster.

On January 15, 2026, the National Financial Regulatory Administration pointed out at the 2026 regulatory work meeting that efforts should be made to keep the city real estate financing coordination mechanism running routinely. On March 17, the Ministry of Finance mentioned in its report titled “2025 China’s Fiscal Policies Implementation Report” that policies supporting special bond issuance for the acquisition of existing stock commodity housing to be used as affordable housing, among others, should be implemented.

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

“Basically, the real estate policy package has already been rolled out to the maximum extent possible. What comes next is to plug loopholes and check whether there are ‘last-mile’ problems in the execution of prior policies.” On March 31, Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, told reporters from the Daily Economic News that the most effective real estate policy at present is to focus on economic fundamentals such as new-type urbanization, the local integration of new urban residents, and stable employment for residents.

Special bonds become an important tool

In the first quarter of 2026, the real estate financing environment remained continuously loose, and the city real estate financing coordination mechanism officially entered a regularized operation phase. On January 15, at the annual regulatory work meeting, the National Financial Regulatory Administration clearly stated that the mechanism should be made regular, to 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 will focus on stabilizing the real estate market, make the most of the real estate financing “white list”制度, support real estate firms’ reasonable financing needs, and implement the hosted-bank system for real estate financing.

On March 16, an expanded meeting of the National Financial Regulatory Administration Party Committee further proposed that the role of the “pre-delivery of completed homes” white list制度 should be leveraged to accelerate the establishment of financing systems that align with the new model of real estate development.

“The regularization of the white list制度 is an important enhancement to the city real estate financing coordination mechanism.” Liu Shui, who leads the research department for enterprises and institutions at the China Index Academy, said that this mechanism will effectively enhance financial institutions’ confidence in real estate firms, and also shows that the “white list” support for real estate firms’ financing policy is shifting from short-term rescue to long-term protection.

For risk prevention, special bonds have become an important tool for destocking and resolving risks. The “2025 China’s Fiscal Policies Implementation Report” released by the Ministry of Finance on March 17 stated that in 2026, China will steadily advance urban renewal. Policies supporting the use of special bond proceeds to acquire existing stock commodity housing for use as affordable housing, among others, should be implemented. Implement and improve regional fiscal policies to enhance the coordination of regional development.

Yan Yuejin, Deputy Dean of Shanghai E-house Real Estate Research Institute, analyzed that special bonds used to acquire stock land and commodity housing achieve “three wins in one go.” They not only open up large-scale inventory reduction channels for developers and relieve liquidity pressure, but also replenish affordable housing supply at low cost, and can further optimize the balance of market supply and demand to stabilize expectations.

Another key measure on the financing side is the optimization of commercial property mortgage policies. At the beginning of 2026, the People’s Bank of China and the National Financial Regulatory Administration lowered the down payment ratio for commercial property purchase loans nationwide to 30%. Cities and provinces including Shanghai and Guangdong quickly followed to implement the policy. Beijing, Qinghai, and others further emphasized revitalizing idle commercial facilities: Beijing allows land-use purposes such as commercial, business-finance, and entertainment/sports/health uses to be converted into each other; Qinghai revitalizes existing commercial facilities through building functional conversions, mixed-use, and other approaches, providing more paths for destocking commercial and office inventory.

The China Index Academy pointed out that the People’s Bank of China’s increased support for commercial and office properties is a concrete reflection of supporting the destocking of the commercial and office market, and it also reflects that the regulatory authorities’ attention to destocking commercial and office projects is increasing. In recent years, many cities have already introduced various supporting policies, including converting existing commercial and office projects into rental housing, supporting compatible building functions, and temporarily changing use.

“The bottom of the real estate market is gradually becoming clear”

Reporters from the Daily Economic News noticed that in the first quarter of 2026, real estate policies had an important shift—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 “continue to exert efforts to stabilize the real estate market and bring it back to steadiness” in 2025 to “focus on stabilizing the real estate market,” and for the first time proposed a three-in-one approach: “tailor policies to local conditions to control incremental supply, destock, and improve supply quality,” re-emphasizing “destocking” after 10 years.

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

On revitalizing stock assets, local authorities have made record-level efforts in acquiring stock land.

According to incomplete statistics from the China Index Academy, as of March 29, across the country, localities had publicized plans to use special bonds to acquire more than 5,800 parcels of idle land, with a total land area of over 300 million square meters and a total amount exceeding 7.8 trillion yuan; special bonds issued exceeded 350 billion yuan, accounting for about 45%. Among them, in 2026 Guangdong, Jiangsu, Sichuan, and other regions issued more than 48 billion yuan, maintaining a relatively strong issuance pace.

Accelerating the rollout of supporting policies for urban renewal became another highlight in the first quarter of 2026.

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〕1), clarifying support for old, dilapidated housing to be “self-demolished and self-built.”

On February 27, Shenzhen issued a notice clarifying that newly launched old-district renovation projects, as a rule, will no longer be required to build affordable housing, reducing the development threshold for companies.

On March 5, Qinghai issued the “Qinghai Province Urban Renewal Action Implementation Plan,” setting targets to implement renewal and renovation for more than 8 old districts by 2030, complete renovations for 150,000 households, and fully eliminate D-level unsafe housing.

On the demand side, policies are becoming more refined. In this year’s government work report, it proposed “strengthening housing security for families having a first marriage and first child, and supporting housing improvement needs for families with multiple children,” tightly linking housing policy with population policy. Many places optimized provident fund policies by expanding their scope of use, supporting inter-city mutual recognition and cross-location borrowing; housing purchase subsidies for specific groups were increased.

On March 30, at an interview with media reporters including those from the Daily Economic News, China Resources Land’s management said that the industry’s most difficult period has already passed and it has formally entered a cycle of building a base, recovery, and deep differentiation. At the policy level, the current policy strength is “relatively moderate,” and there is still considerable room for further efforts in the future.

In its research report, Haitong Securities indicated that “the bottom of the real estate market is gradually becoming clear.” Its core argument is: second-hand housing is experiencing the strongest “early spring” in three years, and the industry has entered a stage of bottoming out and stabilizing.

Cao Jingjing, General Manager of the Index Research Department at the China Index Academy, said that tailoring policies to local conditions remains the main policy line for now. She expects housing policies to be better integrated with population policies, and to strengthen support for housing needs of families having a first marriage and first child, as well as families with multiple children. “In the first quarter of 2026, the real estate market in core cities has already shown a patchy pattern of recovery. The second-hand housing market has performed better than the new home market. In the second quarter, it is expected that the recovery will continue into peak season, driven by the entry of good homes, and the market for the full year will still be in a stage of building a base.” Cao Jingjing said.