What is the outlook for the 2026 real estate market's "small spring" trend? | Chongyang Q&A

Source: Chongyang Investment

Q: How does Chongyang Investment view the “small spring” market in real estate in 2026?

A: Since the Spring Festival, the “small spring” market in real estate has shown distinct characteristics of “Beijing and Shanghai warming first, second-hand homes outperforming new homes, driven by first-time buyers, with rising volume and stable prices.”

Urban differentiation: Beijing and Shanghai lead, recovery tiers gradually form

From a regional perspective, this round of recovery shows a clear urban hierarchy differentiation, with leading cities stabilizing first. First-tier cities, especially Beijing and Shanghai, have performed remarkably, with second-hand home transactions increasing by 28.6% and 36.5% year-on-year respectively after the Spring Festival, significantly higher than the national growth rate of 21.9%. The absorption cycle for second-hand homes in Beijing and Shanghai has dropped to 8.6 months and 4.1 months respectively, with inventory structure continuously improving. The stabilization of core cities often serves as a leading signal for the formation of market bottoms—despite a nationwide year-on-year decline of 13.5% in new commercial housing sales area in January-February 2026, many cities among the 70 large and medium-sized cities still have second-hand home prices in a downward channel. However, the historical pattern of “core cities stabilizing first and expanding recovery energy outward” has been reaffirmed in this round, with the characteristics of market bottom areas becoming increasingly evident.

Market differentiation: Active second-hand market, new homes poised for strength

At the market level, the activity of the second-hand home market is significantly better than that of new homes, showing positive signals on both the volume and price fronts. Data shows that the number of second-hand homes in Beijing is 2.07 times that of new homes, while in Shanghai it is 1.46 times. In the 11th week, the transaction volume of second-hand homes in 20 key cities increased by 21.97% month-on-month and grew by 13.68% year-on-year, continuing the good momentum since the holiday; the number of new home contracts in 14 key cities increased by 32.32% month-on-month during the same period, although there was still a slight year-on-year decline, the month-on-month momentum has obviously rebounded. Notably, the year-on-year decline in the number of approved new residential listings in 35 cities exceeded 40%, with developers actively contracting supply, which helps improve the supply-demand relationship in the new home market. As the heat of second-hand homes continues to accumulate, the conditions for market enthusiasm to transmit to new homes are gradually being established.

Demand structure: First-time buyers dominate, active market entry rhythm

From the perspective of demand structure, this round of market activity is predominantly led by first-time buyers, with a significant increase in willingness to enter the market. In February 2026, among second-hand home transactions in Beijing, Shanghai, and Shenzhen, properties priced under 3 million accounted for 52%, 59%, and 52% respectively, while in Guangzhou, Chengdu, and Hangzhou, the proportion of properties priced under 2 million reached 67%, 89%, and 53% respectively. Taking Shanghai as an example, the number of second-hand homes sold under 3 million from January to February was nearly 17,000, a year-on-year increase of 25.2%, with the proportion rising to 56.1%, an increase of 6 percentage points compared to the same period last year. The concentrated entry of first-time buyers is a direct reflection of the effectiveness of policy implementation and the most solid foundation for market recovery. Although the rhythm of improving demand is relatively lagging, with first-time buyers digesting first and price expectations stabilizing, the initiation of the improvement chain is just a matter of time.

Volume-price relationship and changes on the supply side

On the price side, a positive pattern of “stable volume and price, clear bottom characteristics” is emerging. In February, second-hand home prices in Beijing and Shanghai increased slightly by 0.3% and 0.2% month-on-month, while the national month-on-month decline narrowed to 0.43%, showing a significant slowdown in the downward trend. The listing price trend over the four weeks after the holiday indicates that Shanghai has basically stabilized, with clearer bottom signals for prices in core first-tier cities.

The supply side has also shown notable positive changes. In the three weeks after the festival, the increase in second-hand home listings was significantly slower than in previous years, with Beijing and Shanghai growing by only 1.4% and 3.5% respectively, while Guangzhou even experienced a -0.5% decline. Meanwhile, the bargaining space in first-tier cities continues to narrow, with the bargaining rates in Beijing, Shanghai, and Shenzhen decreasing by 0.4, 1.0, and 0.4 percentage points month-on-month in January. The combination of slowed listing growth, shortened absorption cycles, and reduced bargaining space indicates that seller expectations are stabilizing, and the market is transitioning from panic selling to rational competition, forming a healthy interaction between supply and demand.

Looking ahead, the process of halting the decline and stabilizing the real estate market may not be immediate, and the market may continue to display characteristics of structural differentiation. However, compared to the situation of the past few years, the market changes this year have given us more confidence. From a broader perspective, with the recovery of the capital market and improvement in social confidence, the most painful stage of domestic economic adjustment has passed, and signs of endogenous stabilization are becoming increasingly prevalent.

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Editor: Shi Xiuzhen SF183