Real Estate's Awakening: False Spring, Local Stirrings

Q1 2026: Local Policies “Precise Drip Irrigation,” Core Cities’ Real Estate and Land Auctions Partially Rebound, Overall Recovery Still Unverified

Text | Researcher Wang Wentong and Xin Xiaotong from “Caijing”

Editor | Yang Liyun

“Light rain brings new growth to all plants; a thunder shocks the beginning of awakening.” During the awakening season, spring thunder awakens all things, yet it remains chilly, much like the early spring of 2026 in the real estate market.

Since the start of 2026, local policies have been laying the groundwork for the real estate “awakening” with “precise drip irrigation”: Shanghai’s “New Seven Policies” are the most aggressive, relaxing restrictions, increasing housing provident fund loan limits, and refining property taxes to activate demand for first-time buyers and the second-hand market; Beijing, Guangzhou, Hangzhou, and other core cities have simultaneously introduced measures such as housing subsidies and relaxed purchase restrictions, with over 100 real estate regulation policies issued nationwide in the first two months.

At the recent National People’s Congress, the government work report shifted its language from “stabilizing after decline” to “focusing on stability,” clearly emphasizing policies aimed at ensuring people’s livelihood, coordinating new and second-hand housing to reduce inventories, landing quality housing projects, developing new real estate models, and reforming the housing provident fund system—forming a combined effort with local policies at the beginning of the year.

On the market side, some cities have responded in residential and land markets. Shanghai’s second-hand home transactions have risen, potentially breaking the monthly “frozen” line of 15,000 units; land auction markets have warmed locally, with Guangzhou’s Zhujiang New Town horse track land auction fetching a record 23.6 billion yuan, and core land parcels in Chengdu and Hangzhou attracting high premiums, making quality land the focus of real estate capital.

However, the industry as a whole remains in a correction cycle. For example, in Hainan and other places, the housing market fluctuates short-term with policies and demand, without sustained recovery. Land auctions show significant structural differentiation, with only core city scarce land parcels favored, and nationwide land transaction volumes continue to decline.

As of this publication, the National Bureau of Statistics has not yet released data on the changes in the sales prices of commercial residential properties in 70 major cities for February 2026. According to CRIC Research Institute, the real estate market experienced seasonal decline in February due to the Spring Festival holiday, but second-hand residential prices and rental prices in key cities narrowed their month-on-month declines compared to last year.

This awakening is driven by policy-induced local demand release and market testing. The market is waiting—whether the spring rain of awakening can turn into a “little spring” in the 2026 housing market.

In the still-cold season, the industry’s growth direction is clear and firm: moving away from scale competition toward high-quality development.

Policy “Precise Drip Irrigation” Combo

On Beijing’s commute, Gao Wei habitually opens an app to check transaction data of his preferred community. The two-bedroom units there hover around 4 million yuan, slightly above his psychological price by tens of thousands. Checking listing prices and consulting agents daily has become routine.

He has also tried bargaining face-to-face with several landlords, hoping to “negotiate a parking space,” but without success. However, due to children’s schooling and household registration issues, his available time is limited.

A senior agent in Tongzhou District, Beijing, told “Caijing” that not only buyers are watching prices and seeking the right moment to act quickly, but sellers are also observing, waiting for the most satisfactory transaction price. It’s common to see seven or eight groups of clients negotiating on a single property.

“By March or April, when buyers flood into the market, high-cost-performance homes in popular communities will become even more sought after,” he said.

The market expects reasonable prices, quality “good houses,” and more precise policy combinations to stimulate demand.

At the two sessions this year, the changes in real estate policies in the government work report focused on several aspects:

First, policies emphasize safeguarding and improving people’s livelihood, integrating housing policies with population and fertility policies.

Second, after ten years, the government again mentioned “destocking” in the work report, but unlike the previous round, this involves both new and second-hand housing, with more flexible policies.

Third, the policies for “good houses,” “new development models,” and “urban renewal” are further deepened.

“Good houses” has moved from standard-setting to implementation, focusing on improving property service quality; “new development models” emphasize strengthening foundational systems and supporting policies; “urban renewal” is more closely integrated with economic transformation and modernization governance, supported by measures issued by the Ministry of Natural Resources and the Ministry of Housing and Urban-Rural Development in early 2026, with subsequent financial, tax, and land policies expected to follow.

Fourth, the report first mentions “deepening housing provident fund reform,” making it a key measure for benefiting people’s livelihood and stabilizing the market in 2026.

The real estate policies in the government work report this year are consistent with local policies issued since the beginning of 2026.

Among these, Shanghai’s “New Seven Policies” are the most significant.

On February 25, Shanghai’s Housing and Urban-Rural Development Commission, Housing Management Bureau, Finance Bureau, Tax Bureau, and Housing Provident Fund Center jointly issued the “Notice on Further Optimizing and Adjusting the City’s Real Estate Policies” (“Notice”).

The “Notice” introduces seven new regulations focusing on lowering purchase thresholds, increasing housing provident fund loan limits, and optimizing property taxes, effective from February 26.

Specifically, regarding expanding restrictions, the new policies focus more on areas inside the outer ring, directly enlarging the demand pool within the outer ring, and adding groups with “Shanghai residence permits” held for five years or more, broadening the overall housing market.

For housing provident fund loans, the maximum for first-time homebuyers increased from 1.6 million to 2.4 million yuan. According to CRIC, with additional policies for multi-child families and higher green building loan caps, the maximum could reach 3.24 million yuan.

Regarding property tax, Shanghai optimized its policy in September 2025, offering a tax exemption for non-local residents’ second and subsequent homes based on per capita 60 square meters of exemption. The current policy further refines this for local residents’ children.

Li Yujia, chief researcher at Guangdong Urban Planning Institute’s Housing Policy Center, analyzed that as 2026 progresses, demand for new homes in Shanghai weakens, shifting some to the second-hand market. In the second-hand market, small units and mid-to-low price homes increase significantly, disrupting the original “sell old, buy new” chain. The new policies specifically target non-local buyers sensitive to costs and thresholds.

Zhang Bo, director of CRIC’s 58 Anjuke Research Institute, believes the new policies align with Shanghai’s “improving new homes and meeting urgent second-hand demand” pattern, ensuring new demand is accurately channeled into both markets.

“The ‘New Seven Policies’ have shown short-term stimulating effects on Shanghai’s market.”

Several Shanghai Lianjia agents told “Caijing” that after the policies, some properties were sold on the same day they were viewed, mainly small units and low total prices.

“After the policy was announced, some long-time clients contacted me to revisit properties,” said a branch manager.

He analyzed that the policies stimulate first-time buyers and second-hand home purchasers more strongly.

On the tenth day after the policy release (March 7), Shanghai’s second-hand home transactions reached 1,324 units, the eighth-highest daily volume since 2020. Compared to September 29, 2024, when Shanghai introduced market regulation policies, response speed has significantly increased.

According to Shanghai’s “Online Real Estate” data, from March 1 to 10, the total second-hand home transactions were about 8,467 units, likely exceeding the “frozen” line of 15,000 units for the month.

The “frozen” line measures the key transaction volume threshold indicating market activity: above it suggests market warming and active trading; below it indicates sluggishness and lack of confidence.

Meanwhile, Shanghai’s new home market also shows new momentum. For example, on March 11, daily new home contracts reached 733 units, a significant increase from the early March daily average of over 300.

“With the return to normal after the Spring Festival, policy effects gradually release, and Shanghai’s housing market is expected to become a stabilizing and recovering benchmark among first-tier cities, driving a linked recovery in the Yangtze River Delta,” Zhang Bo said.

However, Li Yujia added that adjustments to Shanghai’s purchase restrictions may negatively impact surrounding cities in the Yangtze River Delta. The next step should be to accelerate industrial collaboration and rationally distribute industry and housing demand, which is key to avoiding Shanghai’s siphoning effect.

Housing Market Fluctuations, Various Causes

Following Shanghai’s “New Seven Policies,” cities like Beijing, Guangzhou, and Hangzhou also introduced new measures to optimize restrictions, provident funds, and housing subsidies.

For example, on March 2, Beijing Haidian District issued “Support Measures for ‘Hai Qing An Ju’”—graduates employed in key industries in Haidian can apply for a monthly 1,000 yuan housing subsidy for up to two years; those renting in northern Haidian get an additional 500 yuan monthly.

According to CRIC, in the first two months of 2026, 101 real estate policies were issued nationwide, slightly fewer than 107 in the same period of 2025, but more than 93 in 2024.

Despite policy stimuli, the overall market remains in adjustment.

Based on the National Bureau of Statistics data, in January 2026, the second-hand housing prices in 70 major cities stopped four months of continuous decline, with two cities—Yangzhou (+0.4%) and Zhanjiang (+0.3%)—seeing month-on-month increases. Compared to first-tier cities, second-tier cities’ declines narrowed earlier.

In new homes, five cities saw month-on-month price increases: Dalian, Hefei, Xiamen, Wuhan, and Nanchong. Dalian led with a 0.2% rise; Shanghai’s prices remained flat compared to last month.

Compared to last year, new home prices are still declining. Data shows that in January, prices in first, second, and third-tier cities fell by 2.1%, 2.9%, and 3.9%, respectively, with the decline widening slightly.

February continued the narrowing trend in second-hand prices, and new home markets showed signs of warming.

CRIC data indicates that in February, the average second-hand residential price in 100 cities was 12,835 yuan/m², down 0.54% month-on-month, narrowing from the previous month. The average new residential price was 17,107 yuan/m², down 0.04% month-on-month but up 2.37% year-on-year.

Rental housing, boosted by holiday travel demand, saw an average rent of 33.96 yuan/m²/month across 50 cities, down 0.11% from January, with a narrower decline of 0.34 percentage points.

Cao Jingjing, general manager of CRIC’s Index Research Department, said that as the holiday ends and pent-up demand is released, coupled with high-quality land supply in core cities, a “little spring” mild recovery is expected this year, with continued market segmentation.

Even as the market stabilizes, all parties should prepare psychologically for fluctuations.

In Hainan, where island-wide quarantine has just begun, Haikou’s Haikou Bay area experienced a rollercoaster over the past two months.

He Mian, a top agent in Haikou, observed that due to the December 18, 2025, official closure of Hainan Free Trade Port and increased year-end demand, transactions surged to about 30 units daily at the end of 2025. After the Spring Festival (late February 2026), volume dropped to single digits, but by March, due to school enrollment timing, daily transactions rebounded to around 30 units.

Buying school district homes is a major demand in Haikou, but buyers are not limited to local families.

CR Land provided data showing that the influx of families, education professionals, and highly educated households—driven by the development of international education zones, university branches, and international schools—has increased significantly, with 15-20% of buyers motivated by children’s education needs.

This is also related to the attraction of offshore enterprises and talent due to the island’s quarantine policies.

However, macro data shows that Hainan’s housing market still lacks a clear upward trend.

According to Hainan Provincial Department of Housing and Urban-Rural Development, in January-February 2026, the sales area of new commercial housing was 1.3594 million m², down 17% year-on-year; sales revenue was 24.221 billion yuan, down 19%; and average price fell slightly to 17,800 yuan/m², down 2%. No month-on-month data was released.

Experts say that quarantine policies primarily impact industry, trade, and capital flows, and their effect on housing prices will take time.

From Hainan’s case, whether through policies or quarantine dividends, the ultimate driver remains population inflow, industry landing, and demand recovery.

Hainan has experienced three rounds of “speculative bubbles” in the past. After the 2018 free trade port policy, some investors were attracted, but over eight years, buyers have become more rational.

Many recent buyers in Hainan told “Caijing” they rented for at least a year before purchasing, experiencing the island’s living environment firsthand, some even traveling and inspecting the entire island before making decisions.

Sanya, a tourism city and a key part of Hainan’s real estate sector, has attracted major developers like CR Land, Poly Developments, and Dahua Group.

Poly Developments has been active in Sanya since 2012. Wang Yue, deputy general manager of Poly (Hainan) Tourism Development Co., Ltd., said that Yacheng Bay and Haitang Bay mainly cater to middle-aged and elderly retirees and high-end travelers, but with the policy-driven upgrade of industries and influx of workers, the trend toward younger residents is becoming more evident. Under government guidance, Poly has built numerous affordable housing units to meet local and new Hainan residents’ needs.

Since the free trade port policies, more companies and talents are eyeing Hainan. Various subsidies have attracted many professionals.

Hainan Wealth Management Industry Association’s Secretary-General Huang Xirui noted that increased employment and industry development support rising property prices around CBDs and key industrial parks, which are warming up significantly. However, overall inventory levels in Hainan remain high.

Land Auction Market “Partially Warming Up”

At the end of February, Guangzhou’s “new land king” emerged, drawing attention to the land auction market and adding momentum to the awakening.

On February 25, Guangzhou’s first land auction after the Spring Festival featured a major parcel in the CBD Zhujiang New Town East District—the “Machang” site. Eight developers participated in a nine-hour, 243-round bidding war, attracting over 100,000 viewers and causing server crashes.

Yuexiu Property won the land with a premium rate of 26.6%. The total transaction price of 23.6 billion yuan ranked second in Guangzhou’s land auction history and fifth nationwide. The residential floor price of 85,000 yuan/m² broke Guangzhou’s “land king” record, seen as a “booster shot” for the industry.

The Machang site is considered the last “gem” in Zhujiang New Town CBD, the most central, largest, and most functional land parcel in Guangzhou’s past decade.

Xiao Wuxiao, chief analyst for CRIC’s Foshan-Guangzhou region, pointed out that recent years saw limited new residential land supply in Zhujiang New Town, with ongoing low transaction volumes—about 10,000 m² annually—yet prices remained high, averaging over 100,000 yuan/m².

A typical example is the luxury project Poly Yuexiyuan, about 2.2 km from Machang. Launched in November 2025, its average transaction price reached 170,000 yuan/m², with some units exceeding 300,000 yuan/m².

The starting price for Machang was 18.6 billion yuan, one of the highest in Guangzhou’s 15-year history.

According to planning, the site’s total construction area will be about 730,000 m², creating a comprehensive complex with high-end residences, luxury commercial, Grade A offices, quality education, and urban parks. A week after the auction, Yuexiu Group and Beijing Hualian signed an agreement to establish the first SKP store in South China at Machang.

Besides Guangzhou’s “land king,” land auctions in Chengdu and Hangzhou are also emerging. On February 10, Chengdu’s Panzhihua Steel area, which had been suspended for ten years, was auctioned again, with Chengdu Jinjiang State-owned Enterprise winning with a 23.03% premium. On March 6 and 10, Poly Developments bought two core parcels in Hangzhou with premiums of 50% and 16.11%, respectively.

Data and market reality show that the “land king” in Guangzhou’s Machang is a continuation of the phenomenon of core city land kings in 2025. This outcome is mainly driven by the intrinsic value of the land, not a sign of overall market warming in the short term.

In 2025, the average premium rate for land transfer in 300 cities reached 5.3%, a four-year high, but only 17% of parcels had premiums above 1%. This indicates that behind “land kings” are structural imbalances in land auction markets.

Industry standards for “hot” land parcels typically include a total transaction price exceeding 500 million yuan and a premium rate of at least 15%. In 2025, only 0.8% of parcels met this standard, mostly concentrated in Hangzhou, Shanghai, and Chengdu.

“Core city parcels in popular cities continue to attract attention, reflecting increased market caution. Developers prefer to invest in high-quality, certain parcels when market expectations are still uncertain,” Zhang Bo said. “When peripheral parcels in first- and second-tier cities and core parcels in third-tier cities are in demand, it’s a clear sign of a full real estate market recovery.”

CRIC data shows that in 2025, the total planned construction area of residential land in 300 cities decreased by 13.7% year-on-year, with transfer fees down 10.7%. The transaction area also declined by about 30% in January-February 2026 compared to the same period last year.

The shift from quantity to quality in land markets has led to fierce competition for premium parcels, which tend to have excellent location, scarcity, complete supporting facilities, or high popularity.

The “land king” in Guangzhou’s Machang is a result of its inherent quality, not a sign of a broad market revival. Moreover, core cities aim to leverage high-quality land to boost the 2026 real estate market, with premium rates often rising in the first quarter.

In January and February 2026, land auction activity increased. CRER data shows that the average premium rate in key monitored cities in February was 9.7%, up 7.6 percentage points from the previous month—the highest in nearly 11 months but still 2.3 percentage points below the same period last year. Besides the “land king” in Machang, cities like Shijiazhuang also saw premium land parcels.

Major participating developers remain state-owned and local government-invested enterprises.

CRIC reports that among the top 100 land buyers in 2025, 41 were local government-invested, far exceeding 14 central enterprises and 29 local state-owned firms. However, total land acquisition by local government-invested companies decreased by 15% year-on-year, while central enterprises increased their land purchases by 20%, with their share rising by 7 percentage points to 50%.

Fangzheng Securities analysts predict that due to destocking, financing pressures, and reduced land acquisitions, new construction starts in 2026 will decline by 16-20% year-on-year. This indicates that developers are actively reducing construction scales to match demand, adopting a more rational approach.

In early 2026, the real estate market shows tentative signs of movement. During the awakening season, with lingering cold, only by anchoring in fundamental supply and demand and optimizing supply structure can the industry complete adjustments and lay a solid foundation for recovery.

(Names such as Yu Min and Gao Wei are pseudonyms at the interviewee’s request.)