China Housing: Tier-1 holds up, lower tiers still drag: Urban renewal agenda ramps

Research evidence excerpt

China Housing: Tier-1 holds up, lower tiers still drag: Urban renewal agenda ramps

Tingting Ge Asia Pacific Economic Research J P M O R G A N(852) 2800-0143 16 June 2026

tingting.ge@jpmorgan.com

improvement remains uneven and K-shaped: tier-1 cities and upgrade/luxury products are

outperforming, while lower-tier cities remain broadly weak.

China’s housing market remains in a time-inconsistency trap. Policymakers aim to improve

affordability and reduce reliance on property, but have slowed price clearing to protect household

wealth and local governments, forcing the adjustment mainly through quantities, with falling

starts, sales, land purchases, and real estate FAI. Recent tier-1 secondary-market improvement

is encouraging, but broader conditions remain challenging, with elevated inventories, weak

household credit demand, and continued declines in real estate investment. As a result, the

baseline should not yet be reassessed: current trends look more like narrow, K-shaped

stabilization within a prolonged quantity adjustment, not the start of a durable nationwide

recovery. With the secondary market increasingly taking share from primary sales, headline

transaction stabilization may coexist with continued softness in new-home sales, construction,

and developer investment.

Housing policy and housing market activity China housing inventory months

Index, in reverse order Index No. of months, both scales Housing policy index Finished -30 100 80 Under construction 8 -20

Housing market 80 7 -10 activity index 70

0 6 60

10 60 5

20 40

30 50 4

40 20 3

50 40

2 60 0

03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 30 1

Source: NBS; J.P. Morgan; Note: Preliminary estimates for Apr '26 housing market 13 14 15 16 17 18 19 20 21 22 23 24 25 26