Thirty-eight months of annual price declines, investment down by about a fifth, low rental yields, restructured developers and a new presale rule: where the market stands and what it means for a foreign buyer.
Few property markets in the world have changed as much in five years as the Chinese one. For a foreign buyer the question is not whether prices fell, but what the market is doing now, how much rent the flat would earn and what can go wrong with a developer or a project. This article collects what was reported by named outlets up to October 2026, with dates, and says plainly what we could not find. It is general information, not investment advice, and it does not recommend buying or not buying. We have no listings in China.
Where prices are now
China's National Bureau of Statistics publishes a 70-city index every month. For August 2026, wire reports of the release say that new-home prices across the 70 cities fell 3.0% year on year, after 3.2% in July, the 38th month in a row of annual declines, and about 0.1% on the month (Trading Economics, via Hellenic Shipping News). The decline is the slowest since December 2025, but it is still a decline. The picture is uneven: Shanghai was reported up about 3.0% year on year, while Guangzhou, Shenzhen, Chongqing and Tianjin were still falling at a slower pace. The number of cities with prices flat or up on the month has grown: 20 of 70 in June (Caixin) and 23 in July (SCMP). We did not find the September 2026 release, so we do not state it.
Activity: investment, new starts and inventory
For January to August 2026, NBS data as reported by SteelOrbis show real estate development investment down 19.9% year on year (about RMB 4.8 trillion), new construction starts by floor area down 24.8%, and commercial floor area sold of about 499 million square metres, down 12.1%. For January to June, Metal.com reported developer funds received down 20.2%. Fitch said in a mid-2026 report that it now expects the value of new-home sales to fall 11% to 13% in 2026, a deeper fall than its earlier 7% to 8%. On unsold stock, Morgan Stanley estimated in January 2026 that national inventory could trend to 31 to 32 months of sales by December 2025; this is an analyst estimate, not an official statistic.
Rental yields are low
Gross rental yields in the largest cities are low because prices are high relative to rents. One undated aggregator page, which attributes the figures to Global Property Guide, gives roughly 1.5% to 2.5% for Shanghai, 1.7% to 2.4% for Beijing, 1.5% to 2.3% for Shenzhen and 1.8% to 2.8% for Guangzhou, and about 2.5% to 4.0% for selected tier-2 cities with more price risk. Treat these as indicative: they are gross, before tax, maintenance, vacancy and agent fees, and we found no official rent series to check them against.
The developers
The market stress came from developers. As reported:
- Country Garden: a Hong Kong court approved its restructuring scheme on 4 December 2025 (effective 30 December 2025), covering about US$17.7 billion of offshore debt according to its adviser Linklaters, and on 16 February 2026 the High Court dismissed a liquidation petition (AFP).
- Evergrande: a liquidation order was made in January 2024 and the company was delisted from the Hong Kong exchange in August 2025 (AP). We found no 2026 update on creditor recoveries.
- Vanke: its first public debt deferral came in December 2025, creditors rejected several extension plans, and its largest shareholder, Shenzhen Metro, committed up to RMB 22 billion in loans through 2026. A Reuters-sourced report in May 2026 said Vanke was weighing repaying 40% of bonds due in June and July with a one-year extension. We did not find how it was resolved.
We cite these as reported events, not as a judgement on any company.
Presales and unfinished projects
China sold much housing before it was built. When developers ran short of cash, some projects stalled and buyers kept paying mortgages on flats they could not occupy. On 28 August 2026 three bodies, the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources and the financial regulator, issued rules that, as reported by Caixin, The Standard and SCMP: require buildings to be topped out before presale; prioritise selling completed, move-in-ready homes on newly auctioned land; put mortgage proceeds on pre-sold homes into supervised escrow, released after the completion filing; and raise the maximum mortgage term from 30 to 40 years. They are not retroactive for projects whose permits were issued before 28 August 2026. Analysts quoted in the reports disagree about the effect: some say the change reduces buyer risk, others that it removes a financing source for developers and may prolong the downturn. We found no data on completion rates of stalled projects.
What policy has done so far
- The white list: financing for eligible projects, launched in January 2024. The Ministry of Housing said approved loans were above RMB 7 trillion by October 2025. Reports in January 2026 said regulators would allow longer loan rollovers; we could not find the official rule. About 60% of surveyed institutions said adequate collateral was the hardest entry condition.
- Easing of purchase restrictions: Shanghai announced a seven-point package in February 2026, Shenzhen eased limits in April 2026, Guangzhou cancelled its restrictions in 2025, and Beijing in August 2026 cut the required social-security or tax period for non-residents inside the Fifth Ring Road from two years to one.
- Mortgage rates: cuts began in September 2024. We found no 2026 change and do not state current rates.
What is known and what is not
Forecasts differ and none is a fact. In January 2026 Morgan Stanley expected new-home prices to fall another 2% to 3% in 2026, with tier-1 and large tier-2 cities stabilising in the second half of 2027 if conditions hold. Fitch's earlier view was a fall of 4% to 6% in 2026 and 2% to 4% in 2027. We did not find IMF or Moody's views. Indicators worth watching are: the number of cities with monthly price rises, starts and investment, months of inventory, developer funding and the completion rate of pre-sold projects.
What this means for a foreign buyer
A property in China is a long, illiquid holding in a falling market, with low rental income and rules on who may buy and on moving money out. Those rules are covered in who can buy and how, land use rights and mortgages and money transfers. City-level differences are in the best cities for foreign buyers, checks in due diligence and scams, and the separate Hong Kong market in the Hong Kong guide. See also what happens when a developer goes bankrupt and how to verify a developer.
FAQ
Are Chinese home prices still falling? Reported 70-city data show new-home prices down year on year in August 2026 for the 38th month, with a slower pace and a few cities rising. We did not find September data.
Is a rental yield of about 2% normal in Shanghai? It is within the indicative range reported by one aggregator for the largest cities, before costs.
Does the August 2026 presale rule remove the risk of unfinished projects? It aims to reduce it for new projects, but it is not retroactive for earlier permits and analysts disagree on its effect.
What this means for a normal buyer
- Treat China as a long-term, illiquid asset, not a quick trade.
- Do not assume yield: reported gross yields in the biggest cities are low and unconfirmed.
- Prefer completed homes over presales, and check who holds the escrow and the title.
- Follow the official monthly release rather than headlines, and ask for the date of any figure.
- Take advice from a lawyer in China before paying anything.
If you want an independent comparison of markets before deciding, an independent buyer-side adviser can help. D.H. Realting works from Warsaw as an independent consultant; ask us how we are paid, as you would ask anyone.