In recent years, the real estate market in China has been continuously declining. The listing volume of second-hand houses has reached a historic high, while the population in China has been steadily decreasing over the past few years. Analysis suggests that the key reason for the stagnant housing sales lies in the dwindling population.
In 2026, the second-hand housing market in China is facing a “drying up” of liquidity, posing a serious challenge to property owners looking to cash out. Data from China Real Estate Information Corporation shows that in January this year, the national listing volume of second-hand houses exceeded 8.5 million units, reaching a historic high. The average transaction cycle for second-hand houses in key cities nationwide has reached 187 days, far exceeding the 1-2 months seen before 2019. In some third and fourth-tier cities, the inventory turnover period has exceeded 30 months, hitting a record high. A large number of properties are “priced but unsalable.”
The inability to sell second-hand houses is seen as a critical variable affecting real estate demand due to population factors. On January 19, the National Bureau of Statistics of the Communist Party of China announced population data: by the end of 2025, the national population had decreased by 3.39 million compared to the previous year. The annual natural population growth rate was -2.41‰, marking four consecutive years of negative growth.
Recently, financial blogger “Financial Intelligence Online” stated in an article that the population is the most crucial factor that truly determines the fate of housing. However, there has been a fundamental change in the population numbers: there are not enough people anymore. More importantly, the main force of homebuyers aged 20 to 45 has been significantly decreasing each year. While before, there was a rush to move into cities and settle down, now many cities are struggling to retain young people. With the urbanization rate close to 70%, the stimulating effect of new urban residents on housing demand is gradually diminishing.
According to “Financial Intelligence Online,” the market expectations have completely shifted. Buyers are now thinking, “If prices keep dropping, why rush to buy? Today it’s down by 100,000, who knows, it might drop another 100,000 tomorrow.” Everyone is waiting and hoping to catch the so-called bottom. Meanwhile, sellers, especially those who bought at the peak prices between 2016 and 2021, are reluctant to sell at a loss. As a result, the market has stagnated. The more buyers decrease, prices fall, and the cycle of declining prices further diminishes buyer interest, leading to nearly dried up liquidity in the second-hand housing market.
It is worth noting that there has been a subtle change in the mainland China property market in 2026: a continuous decline in listing volume. As of February, the listing volume of second-hand houses in the core six cities was around 1.29 million units, falling continuously for four months. The case of Shanghai is particularly typical: according to Anjuke data, the listing volume of second-hand houses in Shanghai has dropped from a peak of approximately 120,000 units in April 2025 to 89,000 units in January 2026, a cumulative decrease of 26% over nine months.
In an article by blogger “Li Yuxuan,” it was mentioned that the collective shift in the mindset of sellers is the logic behind these changes. In previous years, many homeowners had to repeatedly lower prices to quickly cash out, resulting in squeezed profit margins. Now, as prices drop close to or even below the purchase cost, the willingness to sell at a loss significantly diminishes.
The article believes that in most third and fourth-tier cities, with a continuous outflow of population and insufficient industrial support, even with a 30% drop in house prices, there is still no interest from buyers. The rules of the property market have not changed: when prices rise, the impact spreads from first-tier to second-tier cities, and then to third and fourth-tier cities like a domino effect; whereas when prices fall, the chain reaction is reversed, with third and fourth-tier cities collapsing first, followed by second-tier cities loosening, and finally, first-tier cities feeling the chill.
“Financial Intelligence Online” suggests that properties where owners are willing to sell at a “deeply discounted” price may have issues such as old age, unfavorable location, loans, or poor layout and need to be priced more than 30% below market value to attract potential buyers looking to buy at a low point. Properties with old age, unfavorable locations, existing mortgages, or poor layouts have essentially fallen into a deadlock of “listed but unwanted, price reduced but unsellable.” The rules of the second-hand housing market game have been thoroughly altered. Therefore, the struggle for property owners has just begun.
To add to their woes, some local governments are directly acquiring second-hand houses to digest the existing inventory for social housing or rental purposes. However, the acquisition price set by the government is often much lower than the market price. This invisibly sets a lower reference point for the entire area’s second-hand house prices, making it even more challenging for individual landlords to sell their properties. In this besieged situation, which types of second-hand houses can still attract buyers?