Goldman Sachs sees resilient 4Q26 China secondary-home volumes, with Shanghai leading a gradual price recovery into 2027.

Overview

This China property expert-call note assesses near-term secondary-market volume and price trends. Goldman Sachs relays Iceberg Index founder Li Yanguo's constructive view on 4Q26 volumes but more cautious price outlook, with Shanghai expected to lead a potentially broader recovery during 2027.

Core views

The report starts from a mixed market backdrop. Secondary-home prices in most cities saw their sequential decline widen from late August into the first week of September, interrupting the earlier 2026 stabilization pattern in which monthly declines through July had been contained within roughly 0.5%. Tier-2 cities, including core Tier-2 markets, were the main drag and underperformed the expert's expectations. At the same time, the market has already corrected deeply: secondary prices across 40 major cities are about 40% below their 2021 peak, back to March 2016 levels. Nationwide rents have been broadly stable for six months after a persistent decline since 2021, while listing-to-sale price discounts have stabilized; Goldman Sachs views these as signs of improving sentiment, especially in Shanghai. Leading volume indicators improved materially at the start of the traditional “Golden September, Silver October” sales period. Deposits-based real-time transactions rose 10% week on week in the first week of September, and year-on-year growth accelerated to 25% from about 10% during June through August. Visitation traffic increased 12% week on week. New listings also edged higher seasonally, but overall listings have been more stable this year than during the sharp spring 2025 increase. Li therefore expects 4Q26 secondary-market transaction volumes to exceed last year's level, supported by the improved visitation and transaction indicators. He nevertheless expects prices to weaken at the margin as listing supply rises, with the greatest risk in higher-end Tier-2 segments where prior price corrections were relatively limited and catch-up declines may occur. Shanghai is the report's central recovery case. Its secondary listings have fallen more than 30% since April 2025, with the driver shifting from listing withdrawals last year to strong secondary transactions year to date. Lower-ticket “Lao Po Xiao” homes priced below Rmb2mn led the rebound and turned positive year on year; replacement demand has supported stabilization in mid- and higher-ticket homes, and rents have risen for months. If transactions continue to exceed new listings into the spring 2027 sales season, Li expects broad-based price gains across Shanghai segments, amounting to 6%-12% by end-2027, or roughly 0.5%-1% per month. A modest technical pullback after the recent rebound remains possible, but the report expects Shanghai to remain broadly healthy and lead the recovery. The projected recovery is structurally uneven. Shenzhen is described as more sentiment- and investment-driven and may follow Shanghai if Shanghai establishes a clear uptrend, but it has not yet stabilized: earlier strength in homes above Rmb7mn has weakened, while lower-ticket homes remain weak partly because of collective ownership characteristics or suburban locations. Beijing has higher volumes but falling prices because new listings continue to exceed transactions, and early-August policy easing has not meaningfully lifted lower-ticket end-user demand amid late timing and hukou-related constraints. Suzhou shows a weaker version of Shanghai's lower- to higher-ticket stabilization transmission and is viewed as among the likeliest cities to stabilize outside Shanghai. The expert also identifies lower-tier central and western cities as an overlooked bottomed segment: prices are already low at Rmb4,000-6,000 per square metre, and cities such as Xuzhou have seen substantially improved volumes that exceed those in core cities. On policy, the 8/28 move toward a completed-property-sales model has not had a prominent near-term effect, according to Li. Its expected contribution is longer dated: by reducing future new supply, it could support market conditions in 2027-28. The report's broader transmission path is that a sustained Shanghai supply-demand improvement could lift confidence in Shenzhen first and then help other core cities stabilize during 2027, around one year behind Shanghai.

Analysis framework

The note synthesizes an expert call with Iceberg Index data on secondary-home prices, transactions, listings, rents, listing-sale discounts, deposits and visitation. It compares current momentum with earlier 2026 trends and past price levels, then evaluates city-level supply-demand conditions and the potential transmission of a Shanghai recovery to other cities.

Methodology notes

• Industry AnalysisSupply-demand framework

  City-level comparison of transactions, new listings, withdrawals and price movements.

  The report uses whether transactions exceed new listings as the key indicator of tightening supply-demand conditions and a prerequisite for sustained price recovery, particularly in Shanghai.

• Industry AnalysisVolume-price decomposition

  Separate assessment of transaction volumes and housing prices using leading activity indicators.

  Improving deposits-based transactions and visitation support the volume outlook, while listing supply and recent price deterioration underpin the more cautious view on near-term prices.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Recovery transmission across price tiers and cities.

  The report traces stabilization from lower-ticket to higher-ticket housing segments in Shanghai and projects that a Shanghai recovery could spill over to Shenzhen and then other core cities.

Key data

• Secondary-home price decline from 2021 peak~40%Across 40 major cities; prices have returned to March 2016 levels.
• Real-time transaction growth10% week on week; 25% year on yearFirst week of September; year-on-year growth accelerated from about 10% in June-August.
• Visitation traffic growth12% week on weekFirst week of September.
• Shanghai secondary-listing declineOver 30%Since April 2025.
• Shanghai potential price gain6%-12%Potential aggregate gain toward end-2027 if transactions exceed new listings into the spring sales season.
• Lower-tier city home pricesRmb4,000-6,000/sqmCentral and western Tier-3/4 cities identified as largely bottomed.

Impact & implications

The report argues that a stronger sales season can support secondary-market volumes before broad price recovery is established. It identifies Shanghai's supply-demand improvement as the key test for a 2027 recovery sequence, while Beijing, Shenzhen and Tier-2 higher-end markets show that conditions remain highly differentiated across cities and price segments.

Risks

• Prices could weaken further in 4Q26 as new listing supply rises.
• Higher-end Tier-2 housing segments face catch-up decline risk because their earlier price corrections were relatively limited.
• Shanghai's recovery scenario depends on transactions continuing to exceed new listings into the spring 2027 sales season.
• Shenzhen has not yet stabilized, with both earlier high-end strength and lower-ticket demand remaining weak.

What to watch

• Whether deposits-based transactions and visitation remain strong through the 4Q26 peak selling season.
• Whether Shanghai transactions continue to exceed new listings into spring 2027.
• The pace of price pressure in Tier-2 cities, especially higher-end segments.
• Whether a clear Shanghai uptrend produces confidence spillover to Shenzhen and then other core cities.
• The longer-term effect of the completed-property-sales policy on future supply in 2027-28.