China Property: Developers and Unfinished Homes — 2026-10-13

Top developments

Golden Week Sales Surge in Key Cities but Overall Recovery Remains Modest

During the National Day holiday (October 1–7), key cities like Shanghai saw new-home sales double compared to last year, while daily transactions of existing homes in 11 major cities jumped over 40%. This "Silver October" rally was driven by new mortgage interest-subsidy policies and easing purchase restrictions. However, Bloomberg reports that the broader national recovery was only modest, raising concerns about the sustainability of this holiday-driven uptick. The divergence between top-tier city performance and national averages highlights the uneven nature of the current stabilization efforts.

Market Transition to "Existing Housing Stock" Era

State media CGTN reported on October 10 that China's real estate market is fundamentally pivoting from new development to the operation and management of existing properties. This transition marks the end of the rapid expansion phase and the beginning of an era defined by housing stock quality, renovation, and secondary market dynamics. For developers, this shift necessitates a change in business models from land-heavy construction to asset management and service provision, impacting how future revenue streams are structured.

S&P Forecasts Potential Turnaround in Major Cities

S&P Ratings announced on October 8 that China's real estate market may be set for a turnaround, with recovery in the largest cities potentially coming as soon as next year. This optimistic outlook contrasts with earlier cautious stances, suggesting that recent policy measures—including mortgage subsidies and relaxed purchase limits—are beginning to take effect. Analysts note that while the market bottom may have been reached, the recovery will likely be gradual and concentrated in tier-one and strong tier-two cities rather than nationwide.

Second-Hand Sellers Resist Price Cuts Amid Subsidy Policies

A notable trend emerged during the National Day holiday where second-hand home sellers became more defiant against price cuts, creating a standoff with buyers who are waiting for lower prices due to subsidy policies. BigGo Finance reported that this behavioral shift indicates a potential floor forming in secondary market prices, as sellers hold out for better terms rather than capitulating to distressed sale prices. This dynamic complicates the "volume over price" strategy often advocated by policymakers to clear inventory.

Local view

Local media outlets such as Shanghai Securities News highlighted that key cities' property transactions rose year-on-year during the National Day holiday, attributing this to the sustained implementation of "stabilizing the housing market" policies. The Huxiu platform discussed the "time for space" strategy in rescue efforts, noting that first-home mortgage interest subsidies and reforms in completed-home sales are proceeding in tandem. These local perspectives emphasize that while volume has increased, price stability remains fragile, and policy effectiveness is being tested by consumer confidence levels.

Context & numbers

• Transaction Volumes: Daily transactions of existing homes in 11 key cities increased by over 40% during the Golden Week holiday. New-home sales in Shanghai doubled year-on-year.
• Policy Measures: Recent measures include annualized 1% interest subsidies for eligible first-home mortgages and accelerated implementation of completed-home sales pilots.
• Fiscal Context: Local governments continue to face significant fiscal fallout from the property bust, as land finance revenues remain depressed, forcing reliance on central government transfers and alternative financing mechanisms.

On the radar

• October Data Release: Investors are watching for October monthly data to see if the Golden Week surge translates into full-month sales gains or if it was merely a pull-forward effect.
• Policy Follow-up: Attention will shift to whether local governments extend the mortgage subsidy programs beyond their initial pilot phases, particularly in tier-two cities showing less momentum than Shanghai or Shenzhen.
• Developer Liquidity: While no new major defaults were reported this week, the focus remains on whether state-backed developers can maintain liquidity without further bond extensions, given the persistent weakness in private developer financing channels.