In a research note published Monday, Guojin Securities macro team led by Song Xuetao argues that China’s real estate sector has entered a genuine “second half,” as the four-part authoritative commentary published in People’s Daily on August 22–25 and the sweeping institutional reforms unveiled by five ministries on August 28 together mark the definitive end of the old “sell-before-build” paradigm that defined Chinese property for over two decades.

The analytical thread is unambiguous: Beijing will deploy incremental and investment-stabilizing policies, but will not revert to the old playbook of property stimulus, local-government debt expansion, or low-efficiency investment — nor will it sacrifice the hard-won gains of prior risk resolution for the sake of a better short-term growth reading.

The “Zhong Caiwen” Signal: No Going Back

Between August 22 and 25, People’s Daily’s second page ran four consecutive signed commentaries under the pen name “Zhong Caiwen” — “The Resilience and Vitality of the Chinese Economy,” “China as a Positive Contributor and Strong Stabilizing Anchor for World Economic Growth,” “What Does 4.7% First-Half Growth Tell Us?”, and “Promoting High-Quality Development to Advance Steadily and Far.” The byline, which has appeared at pivotal moments since 2024, is widely read as the authoritative interpreter of central economic-policy deliberations — a “user manual” for understanding the Party’s economic agenda.

The timing was deliberate: the pieces landed in the wake of the July 30 Politburo meeting and the release of July economic data, responding to market divisions over the growth outlook. The core message was consistent across all four: observe China’s economy not by speed alone, nor by fixating on individual quarterly or monthly readings, but by the “quality of scientific and technological innovation, industrial hierarchy, sustainability, and the vitality of enterprises as operating entities.”

On the much-watched 4.7% first-half GDP print, the third essay acknowledged that “China’s investment faces considerable pressure to stop declining and stabilize.” But it reframed the slowdown as a natural consequence of the old engine — property and traditional infrastructure — no longer functioning as it once did, compounded by the “objective contractionary effect” of resolving accumulated risks in local-government debt, real estate, and small and medium-sized financial institutions. The prescription: a “sufficient toolbox” of counter-cyclical instruments, but explicitly “not the old road of strong stimulus,” avoiding a policy “dependency syndrome” built on high debt and high deficits.

In Guojin’s reading, the Zhong Caiwen quartet sent a clear signal — incremental policies will come, investment-stabilization policies will come, but none will resurrect the property-local-debt-low-efficiency-investment triad, and none will trade away the fruits of prior risk resolution for a few decimal points of quarterly growth.

August 28: The Institutional Re-Architecture

What followed on August 28 was not marginal tweaking but systemic reconstruction. The Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, and the Financial Regulatory Authority jointly issued the Notice on Improving the Commodity Housing Sales System. The People’s Bank of China and the Financial Regulatory Authority issued the Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Building of a New Real Estate Development Model. The China Securities Regulatory Commission issued the Opinions on Capital Market Support for Building a New Real Estate Development Model. The Financial Regulatory Authority separately released five trial administrative measures covering commodity housing development loans, personal housing loans, commercial real estate loans, urban renewal project loans, and trust-company real estate business.

The sales-system reform carries the heaviest weight:

• Projects that continue under pre-sale must have individual buildings reach main-structure capping before any unit can be sold forward;
• All buyer funds — down payments and mortgage proceeds alike — must flow into regulated custody accounts, unlocked only when the project meets delivery conditions;
• For land parcels sold on or after the notice’s effective date, and for already-sold land without a construction planning permit, completed-housing sales are the preferred model;
• For projects that already hold construction planning permits, completed-housing sales are encouraged;
• The regime introduces “what you see is what you get” delivery and “property certificate upon handover.”

The credit-side companion measures are equally structural. A single “sponsoring bank” is assigned per project, providing development loans through sole or syndicated arrangements. Development-loan tenors are extended to match the full construction-and-sale cycle — capped at 5 years for pre-sale projects and 7 years for completed-housing projects, with the first principal repayment due in principle only after completion filing. Personal mortgage loans are extended from a maximum of 30 years to 40 years. Critically, for pre-sale homes, mortgage drawdown is delayed until after completion filing — ensuring buyers “take possession before they repay.”

The CSRC’s contribution pushes real estate financing away from reliance on issuer-level credit toward project-level credit: “support reasonable financing for developers of all ownership types on an equal basis,” “support listed developers’ private placements,” and enable acquisitions of real estate assets through shares, targeted convertible bonds, or cash. The steady advancement of commercial REITs and real estate private equity funds is also endorsed.

Taken together, Guojin notes, these measures shift real estate policy from “patchwork shoring-up” to a “systemic reconstruction of development and financing institutions.” Economically, “capped pre-sale” plus “delivery-gated fund release” makes the new pre-sale regime functionally equivalent to completed or quasi-completed housing sales. The financing attribute of pre-sale is materially weakened; it acts mainly to lock in demand ahead of time. China’s “selling the building before it exists” model — in use for more than twenty years — is stepping off the historical stage.

Why Now? The Weight of Real Estate Has Already Fallen

Guojin’s research insists the timing is not arbitrary. To build a new development model is not a new concept, but its implementation now is intimately tied to real estate’s changed position in the macroeconomy.

Since 2021, the market has been in continuous adjustment. High-risk private developers have exited in succession. The weight of real estate in the national economy has dropped markedly: new housing starts have fallen from a peak of roughly 2 billion square meters to about 400 million; land-transfer fee revenue has retreated from a peak of nearly 10 trillion yuan to about 3 trillion; and the broad real-estate share of the economy has declined from 19.2% in 2021 to 12.7%. The new economy has replaced property as the more important growth pillar.

[Note: The above figures are as cited in Guojin Securities research. They reflect the research house’s estimates of structural decline in the sector’s footprint.]

Just as important, the market is no longer in its most violent freefall. After roughly five years of adjustment, second-hand transactions in first-tier and some strong second-tier cities have recovered, with prices gradually stabilizing. Total housing sales area has found a new platform of about 13–14 billion square meters over the past two to three years. In the first half of 2026, second-hand homes accounted for 50.4% of total transactional volume nationwide — the first time in a half-yearly measurement that resale exceeded new-home sales across the country. According to data from the Ministry of Housing and Urban-Rural Development, 18 provincial-level regions saw second-hand residential transaction area surpass that of new commodity housing. In some key cities, the resale share exceeds 60%. China’s real estate market has formally entered the stock era.

The “Second Half”: From Financial Engineering to Operating Craft

Guojin draws an analogy to the AI industry: the first half of the AI race is about acquiring GPUs and capital; the second half is about converting compute into revenue and return on investment. Chinese real estate’s first half rewarded financial engineering — raising more capital, acquiring more land. Its second half will reward product capability, development efficiency, and operating competence.

Two enterprise archetypes emerge. The first innovates residential products to create higher per-land-parcel value. The second builds long-horizon operational capability — lowering vacancy in commercial properties, optimizing tenant and brand mix, cultivating commercial ecosystems. For holders of income-producing assets, the ability to consistently raise operating income, control costs, and generate stable cash flow will matter more than simply acquiring land or expanding development scale.

This, the research argues, aligns with the broader reform agenda of anti-involution, locally-adapted cultivation of new quality productive forces, and people-centered new-type urbanization. The reforms push the industry back to its essence: developers must rely on their own capital and professional capability, build better housing, manage properties with care, and operate held assets well — earning reasonable profit commensurate with operating ability. The industry shifts from scale expansion to operating quality, where the synergy between development, property management, commercial operation, and capital exit becomes decisive.

China may well produce its own version of a Mitsui Fudosan — a long-horizon real estate operator — or develop a uniquely Chinese model of development and operation. But whatever form emerges, it will not return to the high-leverage, high-debt, high-turnover “sell-the-empty-lot” era. The market has not vanished; it has transformed from a financial and growth story back into an ordinary — if substantial — business.

Risk Factors Ahead

Guojin tempers its structural optimism with three concrete downside risks: land-transfer fee revenue could fall faster than expected, compounding fiscal pressure; total housing demand could contract beyond forecasts if new-home supply fails to keep pace and resale cannot fully substitute; and the slowdown in developers’ land acquisition and construction starts could drag on fixed-asset investment. The research house also flags that as the new regime takes hold, developers’ return on invested capital may decline, which in turn could trigger a sharper-than-expected drop in land-transfer fees.

The report’s deeper implication is that the past five years of market adjustment were, in essence, the old model settling its accounts. The landing of the new-round reform marks the fundamental conclusion of risk clearance. China’s real estate is entering its true “second half” — not with a bang of stimulus, but with the quiet institutional re-architecture of how homes are sold, how projects are financed, and how the survivors will compete.