Regional pilots and policy innovations reshape housing market dynamics
China’s real estate sector is undergoing a fundamental transformation as multiple provinces actively experiment with completed-home sales, marking a significant shift from the decades-old presale system. The recent mandate by Xinyang city in Henan province – requiring all newly transferred land parcels to sell only completed properties – represents the latest development in this nationwide transition
Defining the New Paradigm
Completed-home sales refer to transactions where developers can only market properties that have passed final inspections and obtained occupancy permits, enabling immediate ownership transfer. This contrasts sharply with China’s prevalent presale system where buyers purchase unfinished units years before completion
“The ‘what-you-see-is-what-you-get’ nature of completed-home sales significantly reduces consumer risks,” explains Li Dong, associate researcher at Tsinghua University’s Urban Governance and Sustainable Development Institute. “It eliminates concerns about project suspensions, major design changes, or quality discrepancies that plague presale transactions”
Policy Momentum Builds Nationwide
Since Hainan pioneered provincial-level completed-home sales in 2020, over 30 provincial regions have introduced related policies by 2025. Notable developments include:
- Beijing’s land auctions now routinely include completed-sale requirements, affecting 62% of residential plots in 2023
- Shenzhen’s 2024 Baoan district land transfer mandated 100% completed sales
- Jingmen city in Hubei reported 80-90% sales rates for its pilot projects
- National completed-home sales reached 32.16% of transactions by early 2025, up from 10.16% in 2020
Implementation Challenges Emerge
The transition presents substantial hurdles for developers and local governments alike：
Financial pressures: Completed-home sales extend developers’ capital recovery periods from 6-12 months to 2-3 years, severely straining cash flows
Supply constraints: Longer development cycles could temporarily reduce new housing supply by 30-40% in some markets
Local fiscal impacts: Reduced land sales frequency and value may affect municipal finances that traditionally rely on presale-fueled land revenues
“Current financial systems and local fiscal structures remain anchored to presale models,” notes Li Yujia, chief researcher at Guangdong Urban Planning Institute. “Transition requires coordinated reforms in development financing, land pricing, and tax policies”
Regional Adaptation Strategies
Local governments are deploying targeted measures to facilitate the shift:
| Region | Support Policy | Impact |
|---|---|---|
| Jiangxi (Ganzhou/Jiujiang) | Extended land payment deadlines; purchase tax rebates | Reduced developer liquidity pressure |
| Shandong | Higher mortgage limits for completed homes | Boosted buyer affordability |
| Hubei (Jingmen) | Priority financing for completed-sale projects | Accelerated project delivery |
The Road Ahead
Industry experts anticipate a phased, regionally-differentiated approach：
Core cities: Major metros like Beijing and Shenzhen may achieve 40-50% completed-sale penetration by 2026 through land auction conditions
Secondary markets: Progressive presale condition tightening (e.g., requiring structural completion before sales)
Policy innovations: Potential introduction of completion insurance and escrow accounts modeled after U.S./European systems
“We’re entering an era of dual systems where completed and presale models coexist,” predicts Chen Wenjing of China Index Academy. “The equilibrium point will vary by city based on market maturity and risk profiles” .
As China’s property sector navigates this historic transition, the emphasis remains on balancing consumer protection with market stability – ultimately steering the industry toward its “high-quality development” objectives .
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