Property & Real Estate

The stabilization thesis survives only on the resale side; the developer-led new-build market got materially worse in September. NBS data for January–September, released October 19, show real-estate development investment down 20.6% y/y at 5.3364 trillion yuan and new-home sales value down 13.9% at 5.3799 trillion yuan — both steeper than the January–August prints of −19.9% and −13.0% ¹. Differencing the cumulative series puts September alone at roughly −26% for investment and −20% for sales value, close to double the year-to-date rate. Second-hand network-signed volume kept growing, +10.7% y/y to 617.46 million square metres. Demand has not vanished; it has moved to finished stock, and the primary market is shrinking faster than the annual headline suggests.

The timing is consistent with the August 28 sales-system overhaul now biting. Requiring presale buildings to top out before sale, and mortgage disbursement only after completion filing, mechanically strips pre-completion supply out of sellable inventory — and no transitional rule for projects presold before that date has appeared in this batch. A developer that cannot sell off-plan must either fund to completion or stop; September's investment and sales drop is what that looks like in aggregate. The alternative reading — a base effect or a one-month air pocket as buyers wait for clarity — cannot be excluded from a single monthly observation, and October's release is the test.

The sharpest deterioration is on delivery. Residential completions fell 26.6% y/y to 163.01 million square metres, and differencing implies September completions of about 2.17 million square metres versus roughly 3.4 million a year earlier, a fall of more than a third ¹. New starts fell 24.9% and floor space under construction 12.8%, so the pipeline is contracting at both ends. This is the number that matters for the delivery guarantee on presold homes: completions falling faster than sales means the backlog of sold-but-undelivered units is being worked down more slowly, not faster, whatever the headline destocking figure says.

Destocking is improving, but slowly and from the wrong end. Unsold completed commercial housing stood at 748.25 million square metres at end-September, down 1.5% y/y versus 1.1% at end-August — roughly 5 million square metres cleared in the month. The composition is worse than the total: stock on the shelf under three years fell 5.0%, so the overhang is steadily aging into long-dated, hard-to-sell inventory that neither price cuts nor standard demand easing shifts quickly.

Financing shows no turn. Developer funds received fell 21.6% y/y to 568.13 billion yuan, with domestic loans down 33.1% to 76.24 billion, self-raised funds down 21.4%, deposits and presales down 14.8% and personal mortgages down 22.1% ¹. The project-level, lead-bank model meant to replace entity credit is still not visible at the aggregate, and the demand-side sweeteners — the PBOC/NFRA 40-year maximum mortgage term, Chongqing's 2.4 million yuan multi-child provident-fund ceiling — have not moved the mortgage series, which is still falling faster than sales ².

Prices are the missing input this cycle: no September 70-city index appears in this batch, so the last read remains August, with Shanghai alone at +0.4% m/m and +3.0% y/y, Beijing at 99.8 and 97.7, and most cities clustered between 99.4 and 99.8 ³. Municipal optimism should be read as exception, not trend: Chongqing's September 3 autumn fair repeats seven consecutive positive months in central-city transactions and July's first positive monthly price print of 0.1% ². Primary property-policy documents are thin; the closest adjacent signals are administrative — the second national real-estate registration skills competition in Wuhan on September 2–4 ⁴, Guizhou's 20 'Home Party Building' measures for compound governance ⁵, and Dalian clearing 446 million yuan of arrears plus 619 million yuan of overdue enforcement payments, a marginal liquidity fix for local firms ⁶.

The macro frame explains why easing is not converting. Third-quarter GDP grew 4.5% y/y and 4.6% for January–September ⁷; a property investment series running at −20.6% is still the single largest drag on that number. Household income rose 5.3% nominal while consumption rose 3.6% ⁸ — the constraint on housing demand is price expectation and delivery confidence, not household cash flow, which is why rate and term sweeteners underperform. Net: the split economy of Chinese housing is intact and widening, with resale absorbing demand the new-build market can no longer serve. Watch three things — whether October confirms September was a trend rather than a one-off, whether a transitional delivery rule for pre-August-28 projects appears, and whether completions stabilize. Until completions turn, thin price gains in a handful of core cities are a shallow floor, not a recovery.