CICC: Major cities may see housing prices stabilize and hit turning points in succession over the next two years.

Background

China's property market has been in a prolonged downturn characterized by falling transaction volumes, declining prices, developer defaults, and shrinking investment. Policymakers have introduced successive rounds of stimulus—including mortgage rate cuts, relaxed purchase restrictions, and developer financing support—but recovery has been uneven across cities. CICC's report represents one of the more structured institutional attempts to forecast when stabilization might actually materialize at the city level, rather than relying on national-level averages that obscure significant regional divergence.

Key Points

• Second-hand market as the leading indicator: CICC places particular emphasis on the second-hand housing market, raising its 2026 sales area projection specifically for this segment. This reflects a broader structural shift in China's housing market—from a new-construction-dominated model toward a more mature market where resale activity drives price discovery and sentiment.
• Stabilization, not recovery: The report carefully frames the turning point as "环比走稳" (month-over-month stabilization), not a rebound or price increase. This is a notably conservative and realistic framing, suggesting that even in CICC's base case, absolute price levels may remain well below previous peaks.
• City-by-city methodology: Rather than issuing a blanket national forecast, CICC uses a two-dimensional scoring framework—second-hand listing destocking cycle (how quickly surplus inventory is absorbed) and overall housing supply-demand balance. This granular, city-level approach acknowledges that China's property market is deeply fragmented: tier-1 cities like Shanghai and Shenzhen may stabilize years before lower-tier cities with chronic oversupply.
• Staggered timeline (2026–2027): The report projects a phased process: a small number of cities first stabilize in 2026, with the effect broadening to "库存条件较好的主要城市" (major cities with better inventory conditions) by 2027. This implies that many smaller or oversupplied cities will not see stabilization in this timeframe—a tacit admission that a large portion of China's housing stock faces prolonged weakness.

Significance

This report signals growing institutional confidence that the floor for China's housing market is approaching, albeit gradually and unevenly. The decision to upgrade second-hand housing projections while holding new-home forecasts steady suggests CICC sees demand shifting toward existing properties—a trend with major implications for developers, land sales revenue, and local government fiscal health. For investors and policymakers, the key takeaway is that recovery will be highly differentiated by city: inventory management and demand fundamentals will separate winners from laggards, and national-level indicators will increasingly mislead rather than inform. The report implicitly supports the case for continued localized policy support in weaker markets rather than a one-size-fits-all stimulus approach.