China Property: Developers and Unfinished Homes — 2026-10-17

Top developments

S&P forecasts potential market turnaround for major cities

S&P Global Ratings indicated that a recovery in China’s largest cities’ real estate markets could materialize as soon as next year, marking a potential end to the five-year downward spiral. This assessment comes as the market transitions from a phase of crisis management to one of stabilization, although the agency cautioned that the pace of recovery will depend on broader economic confidence and income growth.

Golden Week sales show modest but uneven recovery

The recent "Golden Week" holiday period saw a modest increase in home sales, particularly in key cities like Shanghai, where new-home sales doubled year-on-year. However, Bloomberg notes that the overall impact of the latest stimulus measures on national sales remains limited, raising concerns about the long-term efficacy of recent policy tweaks in reversing the broader market slump.

Market pivots to "existing housing stock" era

Official commentary from CGTN highlights a structural shift in China’s real estate sector, moving away from new development toward the operation and management of existing housing stock. This transition implies that developers must adapt to a "buyer's market" where inventory clearance and delivery quality are paramount, while the government focuses on stabilizing the secondary market rather than fueling new construction booms.

1 sources

news.cgtn.com

news.cgtn.com

Local governments face fiscal strain from property overhaul

The restructuring of the property sector continues to put pressure on local government incomes, as land sales—a traditional revenue pillar—remain sluggish. Recent auctions for high-value plots have attracted limited interest, forcing municipalities to rely more on central fiscal transfers and alternative revenue streams, which complicates their ability to fund local infrastructure and housing subsidies.

Local view

21 Economic Net reports that while some cities experienced a boost in transaction volume during the National Day holiday due to mortgage interest subsidies, the overall market remains cautious. Local developers are aggressively using promotions like parking space discounts and "housing festivals" to clear inventory, but buyers are increasingly wary of unfinished projects, preferring completed units or those with government-guaranteed delivery schedules.

Sohu highlights that the era of "pre-sale" is effectively ending, with a strong push toward "existing home sales" (completed units) to prevent new instances of unfinished projects. This shift is reshaping developer cash flow models, as they can no longer rely on pre-sales to fund construction, leading to a consolidation where only financially robust state-owned enterprises dominate new land acquisitions.

Context & numbers

• Top 100 Developer Sales: In the first nine months of 2026, the top 100 Chinese developers recorded total attributable sales of approximately 2.26 trillion yuan ($337 billion). Poly Developments reclaimed the top spot from China Overseas Land & Investment, signaling a shift in market leadership among state-backed giants.
• Price Trends: Recent data indicates that while some tier-one cities like Shanghai saw price stabilization or slight increases, second-tier cities continue to face downward pressure. The "70-cities" index shows a divergence, with major hubs holding steady while lower-tier markets struggle with inventory overhang.
• Policy Support: The central government's mortgage interest subsidy policy, introduced in late September, is being credited for the slight uptick in October transactions, targeting first-time homebuyers to stimulate genuine demand without distorting market prices.

On the radar

• Q3 Financial Reports: Investors and creditors are closely watching upcoming Q3 earnings reports from major distressed developers like Vanke and Country Garden. These reports will provide critical insights into their liquidity positions and progress on debt restructuring plans, which are nearing critical deadlines.
• Bondholder Meetings: Several developers are scheduled to hold bondholder meetings in late October to vote on extension proposals for maturing notes. The outcomes will determine whether these firms can avoid technical defaults, a key signal for the broader market's risk appetite.