Sinolink: Looking at the real estate market from the perspective of "Little Spring", it is expected to reach the bottom.

In our previous report, we pointed out that "behind the positive changes in the real estate market, there are both short-term factors and long-term factors supporting it. 'Golden March and Silver April' is a key window to test the rhythm of the real estate market stabilizing after the decline." The core difference in the current market is whether the halt in the decline of the housing market since the beginning of 2026 is sustainable. As the market enters the off-season of transactions after "Golden March and Silver April," will the real estate market stabilize after hitting bottom, or will it replicate last year's trend and start a new round of accelerated decline? Through the performance of this round of real estate "mini spring," we attempt to provide an answer. 1) The quality of the real estate "mini spring" 1. Transaction volume Due to the impact of the Chinese New Year, the second-hand housing signing data in key cities in 2026 was weaker than the same period in 2025. From March 1 to March 26, the transaction area of second-hand houses in 22 cities decreased by 14.5% year-on-year, with first-tier, second-tier, and third-tier cities decreasing by 2.9%, 22.7%, and 15.6% respectively. Among them, Xiamen, Nanjing, Shanghai, Beijing, Ningbo, Wuxi, and Foshan had better signing volumes compared to the same period last year, with year-on-year increases of 10.8%, 4.5%, 3.9%, 3.5%, 2.5%, and 1.3%, respectively. Boosted by the "Shanghai seven measures," the weekly signing volume of second-hand houses in Shanghai has reached a new high since the "mini spring" of 2021, and the March transaction volume is expected to exceed 31,000 units, reaching the best level since April 2021. It is worth noting that the signing volume of second-hand houses in Shanghai has been above 20,000 units for five consecutive months since November 2025 (adjusted for non-Chinese New Year period in February). Similar situations have only occurred twice in history: during the peak trading period from May 2020 to July 2021 and the policy dividend period from November 2024 to May 2025. However, the relatively lagging signing data is not enough to reflect the true quality of the 2026 "mini spring." Due to the later timing of the Chinese New Year in 2026, it takes time from post-holiday resumption to viewing transactions, so the start of the "mini spring" is later, but the momentum is stronger. For example, in Beijing, the "mini spring" of 2025 started in the fourth week of February, with a weekly signing volume of 4510 units, and the single-week signing volume during the "Golden March" remained between 4300-4500 units. In contrast, the "mini spring" of 2026 started in the second week of March (March 9th to March 15th), with a weekly signing of 4141 units, lower than the same period last year. However, by the third week of March (March 16th to March 22nd), the signing volume had climbed to 4973 units, and this week continued to rise, with the signing volume expected to exceed 5000 units. Looking at the more leading real-time signing data, the second-hand housing transactions in most cities during the "mini spring" outperformed the same period last year. The performance of lower-tier cities was more prominent. As of March 24, the real-time signing volume of second-hand houses in 26 key cities increased by 13.0% year-on-year, with the growth rate rebounding from the previous week. The year-on-year growth rates of real-time signing volumes in first-tier, second-tier, and third-tier cities were 8.2%, 14.8%, and 30.2%, respectively. Cities such as Xuzhou, Nantong, Wuxi, Hefei, Nanjing, and Nanchang had significant increases, with year-on-year growth rates of 82%, 58%, 48%, 45%, 33%, and 33%, respectively. Shanghai and Beijing achieved double-digit growth on a high base from the same period last year due to relaxed purchase restrictions, with year-on-year growth rates of 16% and 11%, respectively. Cities such as Hangzhou, Shenzhen, and Guangzhou had weaker real-time second-hand housing transactions than last year, with year-on-year declines of 27%, 10%, and 3%, respectively. 2. Listing price Since the "mini spring," there have been fluctuations in housing prices nationwide. As of March 22, the month-on-month decline in the listing price nationwide widened to -0.5%, compared to -0.1% in February. Excluding structural distortions and delays in transactions, the month-on-month decline in housing prices nationwide was -0.2% as of March 22; among which, first-tier, second-tier, and third-tier cities had month-on-month declines of -0.3%, -0.2%, and -0.1%, respectively. Currently, first-tier cities have essentially retraced the price increases since February, indicating that the supply-demand balance can only maintain marginal stabilization of housing prices. Once prices rebound, upward pressure from the supply side will push prices back to the original levels. The direct reason for the marginal decline in housing prices since the "mini spring" is that the listing volume of second-hand houses in key cities has risen again since March, intensifying the supply-demand game, with some sellers choosing to "trade volume for price." For example, in Shanghai, the narrow listing volume of second-hand houses fell continuously from 93,000 units at the beginning of 2026 to 84,000 units before the Spring Festival, leading to a slight increase in Shanghai house prices. However, since the "mini spring," some property owners who had withdrawn their listings chose to relist during the peak transaction season, leading to a rise in the narrow listing volume of second-hand houses in Shanghai to around 87,000 units, close to the level at the end of January. With the increase in supply, the month-on-month listing price in Shanghai has turned negative again, and prices have been maintained at the level of late January. Overall, the change in listing volume largely determines the trend of housing prices. A rapid increase in listing volume typically indicates the start of accelerated price declines, while a sustained decrease in listing volume usually accompanies a narrowing downturn in housing prices. During last year's "mini spring," the 26 key cities saw a 10% increase in listing volume, which was an important reason for the month-on-month decline in housing prices exceeding 1% after the peak transaction season of "Golden March and Silver April." Until a significant decrease in listing volume appeared in December 2025, the rate of decline in housing prices rapidly narrowed, reaching a bottom in February. Unlike the "mini spring" of 2025, the upward trend in second-hand housing listing volume in 2026 is relatively moderate, leading to the conclusion that the housing market is unlikely to repeat last year's accelerated decline after the end of "Golden March and Silver April." As of March 24, the month-on-month increase in second-hand housing listing volume in the 26 key cities was only 0.6%, significantly lower than the 5.1% increase in the same period last year. Among them, Wuhan, Changsha, Shanghai, Hangzhou, and other cities had a faster month-on-month increase in listing volume, while Hefei, Tianjin, Nanjing, and Guangzhou experienced a significant decrease. 3. Transaction structure Since the beginning of the year, there have been improvements in the transaction structure of key cities. Taking Shanghai as an example, the proportion of transactions over 3 million yuan in February 2026 has increased from 37% in December 2025 to 41%, and those over 7 million yuan increased from 8.8% to 9.6%, indicating that the recovery of the real estate market is gradually shifting from a focus on low-priced properties to improved properties. The increase in transaction prices in high-tier cities also indicates that purchasing power in the housing market is increasing. In first-tier cities, the transaction prices in Shanghai, Shenzhen, and Guangzhou increased by 7.0%, 6.7%, and 4.3%, respectively, compared to the end of last year, while Beijing saw a slight decrease of 3.4%. Second-tier cities such as Chengdu, Tianjin, Nanjing, Xiamen, Hangzhou, and Changsha saw a general increase in transaction prices, with growth rates ranging from 4.3% to 17.0%. On the other hand, cities like Dalian, Wuhan, Qingdao, Suzhou, and Shenyang saw slight decreases in transaction prices. In fact, the lack of a significant improvement in household income is not a barrier to stabilizing the housing market. On the one hand, compared to the pressure of income growth, housing prices are actually over-adjusted, with cumulative declines of 37.4% for second-hand listing prices and 41.2% for transaction prices nationwide. In terms of the housing-to-income ratio, the affordability of housing in most cities is better than in 2006, indicating that expectations are the key factor influencing the stabilization of the housing market rather than income levels. On the other hand, as housing prices decrease, down payments are reduced, and provident fund loan limits are raised, some buyers prefer to make a one-time purchase. The active entry of improved properties into the market releases signals of market recovery. 2) After the "mini spring," will the housing market replicate last year's trend? After the 2025 real estate "mini spring" ended, the housing market did not continue its stabilization trend but instead initiated a new round of accelerated decline. This year's "mini spring" shows that transactions are favored over prices overall, but since March, there has been an increase in listing price declines, intensifying market divergence regarding the future housing market trend. In fact, the improvement in the housing market since the beginning of the year is a natural stabilization of valuation bottom, while last year's lively "mini spring" was mainly the result of policy stimulation, indicating a fundamental difference between the two. The fundamental reason for the market weakening again last year was the insufficient unwinding of the housing price bubble at that time. The favorable policies could only release the pent-up demand, insufficient to sustain the valuations of housing prices in the long term. In contrast, the stabilization and recovery of the housing market in 2026 have dual support from long-term and short-term factors, determining that the housing market post-"mini spring" will not repeat last year's decline: The first support is based on long-term factors such as cumulative price declines, rental yield, housing-to-income ratio, indicating that the housing market has reached a valuation bottom, with limited further downward space. From the cumulative decline in housing prices, the average listing and transaction prices of second-hand residential properties nationwide have decreased by 37.4% and 41.2% from the historical peak in July 2021, reaching the average level of major countries' decline cycles, surpassing most global real estate downturns.