On August 28, 2026, several key government bodies, including the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, the financial regulator, the People's Bank of China, and the securities regulator, jointly issued a series of significant new policies. Following these announcements, market discussions have emerged suggesting that "the era of completed properties could boost home prices significantly."

However, the China Index Academy suggests this assertion warrants careful consideration. While the pace at which new projects enter the market may slow down with the shift toward selling completed properties, the existing housing supply remains robust, making a dramatic surge in home prices unlikely. The Academy's perspective is grounded primarily in two key factors.

First, the dynamic between supply and demand in the market has fundamentally shifted. Following nearly three decades of rapid development, the real estate market in China has transitioned from a period of high demand and shortage to one characterized by a structural oversupply. The era of housing scarcity has passed. Even though the new policy temporarily slows the introduction of new projects, it does not adopt a uniform national standard. Instead, it implements a categorized approach: "old projects follow old rules, new projects follow new rules." The majority of existing housing stock and projects currently in the pipeline will proceed at their original pace. As a result, the overall supply of new homes will remain sufficient, and the new policy will not cause a substantial short-term reduction in market supply, thereby limiting the potential for significant price increases from the supply side. According to the National Bureau of Statistics, as of the end of July 2026, the nation's unsold area of new commercial residential housing stood at approximately 409 million square meters. Concurrently, data from the China Index Academy indicates that as of the end of July, the sellable area in 50 key cities reached 291 million square meters, ensuring that new supply entering the market is quite ample.

Second, from the perspective of developers' cost structures, the recent policies have been accompanied by measures such as optimizing the payment methods for land transfer fees and increasing financial support. These initiatives are expected to alleviate and offset some of the capital cost pressures developers encounter when transitioning to the completed-property sales model. These supporting policies provide strong backing through several avenues. For instance, the policies for development loans have been optimized. By refining loan terms and usage conditions, financial institutions are increasing their support for development loans, helping developers manage the pressure of high upfront investment and prolonged capital occupation inherent in the "build first, sell later" model. Furthermore, financial support from capital markets has been enhanced. Developers receive backing through multiple channels, including bond issuances and equity financing, which broadens their access to medium and long-term funding sources and optimizes their financing structures to lower overall capital costs. Additionally, optimizing the payment schedule for land transfer fees and a trend toward more rational land prices will directly help reduce the land cost component for completed-property projects at the source. For example, the first land parcel under the "completed-property sales commitment system" was recently sold in Guangzhou. As a supportive measure, the local government allowed for the installment payment of land transfer fees—requiring at least 50% payment within 30 days of signing the contract, with the full amount due within two years. This greatly eases the initial payment pressure on developers. The policies also require streamlining the construction approval process and shortening administrative review deadlines, enabling companies to improve efficiency and absorb some of the costs themselves.

During this industry transition, property developers are expected to enhance operational efficiency and shorten construction cycles through refined management, standardized building practices, and supply chain coordination. This will allow them to gradually absorb cost pressures rather than simply transferring them to buyers through higher prices. It is also important to note that, given the current priority on accelerating sales to recoup capital, developers are likely to remain cautious about raising project prices. With the combined effect of these various factors, the comprehensive costs associated with shifting to completed-property sales are expected to be effectively offset, creating favorable conditions for a smooth transition.

In a comprehensive analysis, the China Index Academy concludes that the overall impact of completed-property sales on home prices is likely to be limited. This shift will guide developers to return to competing on product quality and performance. It will also promote the industry's transformation from the old model characterized by high debt, rapid turnover, and high leverage to a new phase of high-quality development that prioritizes quality and efficiency. Furthermore, it will encourage a more rational real estate market, where future prices will be more accurately determined by genuine supply and demand, as well as factors such as a property's location, quality, and associated services.