China real estate ASP declines continued to narrow in March, with the clearest improvement in tier-1 cities

Overview

This report is Goldman Sachs’ monthly tracker on China’s real estate market, with primary focus on March 2026 nationwide primary housing, secondary housing, land market, developer financing, construction chain, and developer land acquisition behavior, plus GS e forecasts for April 2026. The key conclusion is that the price side shows marginal improvement, especially with stronger ASP momentum recovery month-over-month in tier-1 cities; the sales side also improved more than expected in March, and further improvement is expected in April given the low base and stable month-over-month trend; however, new starts, completions, and value-chain indicators in real estate still show that fundamentals are not fully recovering.

Core views

The report states that March was the third consecutive month of narrowing ASP declines across 70 cities, with improvements in both primary and secondary markets. Tier-1 cities were the key highlight, with primary ASP up +0.2% month-over-month and secondary ASP up +0.4% month-over-month. In March, nationwide sales area and sales amount contraction narrowed to -7% and -13% year-on-year, better than prior GSe; secondary transaction volume in 15 core cities was down -8%, also better than prior high-double-digit decline expectations. Looking to April, the report expects primary and secondary ASP declines to continue narrowing, with the tier-1 month-over-month recovery continuing; new-home sales area to turn positive year-on-year, sales amount to remain roughly flat year-on-year; completions and new starts to remain year-on-year down; and secondary transaction volume to improve by low single digits year-on-year.

Analysis framework

The report combines NBS, Centaline, CREIS, CRIC, Beike, and Goldman Sachs’s own tracking framework, monitoring in detail primary sales, secondary transactions, 70-city ASP, construction activity, land market, developer financing, and key developer land purchases, and comparing March actual performance with 1-2 months, prior GSe expectations, and April GSe forecasts.

Methodology notes

• Market trackingGS Property Monthly Tracker

  Tracks China real estate sales, pricing, construction, land, and financing changes using monthly high-frequency and official data.

  The framework presents March actuals, 1Q26 cumulative outcomes, deviations from GSe, and April forecasts side by side to assess whether marginal industry trends are improving.

• Price analysis70-city ASP index

  Uses month-over-month changes in primary and secondary residential ASP across 70 cities to measure pricing pressure.

  The report particularly focuses on tier-1 and core tier-2 cities, because price stabilization or a positive turn in these cities can become a leading signal for restoring market confidence.

• Developer profitability analysisProject-level GPM and land reserve quality monitoring

  Assesses land investment quality through tracked developers’ land-buying expenditure as a share of monthly contract sales, city-tier concentration, and project-level gross margins.

  The report shows that in March, tracked developer land purchases were about 31% of monthly contract sales, project-level GPM was about 25%, and 98% was exposed to first- and second-tier cities.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China real estate sector

  primary coverage focus

  Strengths

  ASP declines narrowed in March, sales performance was better than expected, and price recovery in tier-1 cities led.

  Weaknesses

  New starts, construction activity, and completions are still down year-on-year, so recovery is not broad-based.

  Comparison

  March performance was better than January-February and better than some prior GSe expectations.

  Risks

  Price recovery may not spread beyond a few cities, and transaction improvement may reflect a low base rather than true demand recovery.

• Tier-1 real estate market

  leading recovery area

  Strengths

  Both primary and secondary ASP showed month-over-month improvement, secondary ASP turned positive month-over-month, and supply competition in core areas is limited.

  Weaknesses

  Improvement remains concentrated in core cities and core regions, and spillover to other cities is still uncertain.

  Comparison

  Tier-1 cities clearly outperformed tier-2 and tier-3 cities.

  Risks

  If listing volumes rise again or policy support is insufficient, price recovery could slow.

• Large state-backed developers

  potential beneficiaries

  Strengths

  Land purchases are more concentrated in tier-1 and tier-2 and top-10 cities, with project-level gross margins around 24%-25%; land investments increasingly focus on regional and profit quality.

  Weaknesses

  Overall sector sales amount continues to decline, and investment pace needs to stay aligned with contract sales.

  Comparison

  Compared with weaker-credentialed or liquidity-pressured developers, stronger state-backed developers are better positioned to participate in quality land top-ups.

  Risks

  Higher land costs, slower-than-expected sales recovery, or renewed financing tightening could compress returns.

• Real estate construction value chain

  lagging pressure point

  Strengths

  The declines in new starts and completions narrowed versus January-February.

  Weaknesses

  April completions are still expected to be down about 10% year-on-year, new starts still down in high-double-digit range, and glass/cement indicators show only modest momentum.

  Comparison

  Price and sales marginal improvements are leading construction-chain recovery.

  Risks

  If construction stays subdued, upstream building materials and real estate investment recovery could remain delayed.

Key data

• March 70-city primary ASPMoM -0.2%February was MoM -0.3%, so the decline continued to narrow.
• March 70-city secondary ASPMoM -0.2%February was MoM -0.4%, and secondary ASP improved in 13 cities.
• March tier-1 primary ASPMoM +0.2%The strongest month-over-month print since May 2023.
• March tier-1 secondary ASPMoM +0.4%The first month-over-month turn to positive since March 2025.
• March national commercial home sales areaYoY -7%Better than high-frequency tracking and prior GSe; 1Q26 was YoY -10%.
• March national commercial home sales amountYoY -13%1Q26 was YoY -17%.
• March secondary transaction volume in 15 citiesYoY -8%, MoM +112%Better than prior GSe expectations of a high-double-digit YoY decline.
• March new startsYoY -17%1Q26 was YoY -20%, still down but the rate of decline narrowed versus January and February.
• March completionsYoY -19%1Q26 was YoY -25%, largely in line with GSe.
• March new developer funding sourcesMoM +48%, YoY +14%Drove 1Q26 YoY +7%, mainly supported by domestic bond issuance.
• March land sales area and amountYoY +2% / -29%A clear improvement from February's -25% / -43%, with 1Q26 at -18% / -38%.
• March tracked land-buying intensity for six developersabout 31% of contract salesProject-level GPM was about 25%, 98% was in tier-1 and tier-2 cities, and 45% was in top-10 cities.

Impact & implications

The implication for China’s real estate sector is that the market is showing marginal stabilization on both price and sales fronts, with core tier-1 cities potentially becoming the key area for a positive feedback loop. If price stability, falling secondary listings, and improving rental yield persist, housing cost pressure for potential buyers may ease and sector sentiment may improve. But the construction chain remains weak, indicating that development investment and upstream demand recovery are lagging; developers still need high-quality land acquisition, better financing, and policy support to restore profitability and liquidity.

Risks

• Price stabilization in tier-1 cities may fail to spread to other cities, preventing a positive feedback loop in the sector.
• April transaction improvement may be mainly due to a low base rather than a substantive recovery in demand.
• New starts, completions, and real estate investment remain sluggish, weighing on the real estate chain.
• If secondary housing listing supply rises again, secondary ASP could again come under pressure.
• Policy support may be weaker than expected in either scale or speed, including housing provident fund reform, mortgage-rate cuts, home-loan subsidies, and inventory absorption.
• Insufficient improvement in developer liquidity, with whitelist project loans, C-REITs, and financing support unable to ease pressure effectively.

What to watch

• Whether core tier-1 cities, especially Shanghai and Shenzhen, show sustained price stabilization or a sustained inflection point.
• Whether other cities follow the improvement seen in tier-1 cities.
• Whether secondary listing supply in high-tier cities keeps declining.
• Whether rental yields and rent stability in high-tier cities continue to improve.
• Policy progress on housing provident fund reform, large-scale mortgage-interest subsidies, and further commercial mortgage-rate cuts.
• Whether major restrictions on home purchases in core areas of tier-1 cities are further relaxed or lifted.
• To what extent C-REITs, especially commercial real estate REIT pilots, improve developer liquidity.
• Whether white-list project lending, government inventory repurchases, and urban village redevelopment funding support accelerate.