New Delhi, Oct 12 (IANS) China’s housing market has been framed as stabilising in recent months, but the recovery is fragile and driven largely by resales rather than new construction, which could leave broader economic strains intact, a new report has said.

The report from Myanmar-based Mizzima said the share of second‑hand home transactions has surged sharply from about 27 per cent in 2020 to over 50 per cent in 2026, offering some relief to market activity. However, resale activity is an ownership transfer rather than new production and therefore contributes little to gross domestic product beyond associated services such as brokerage fees.

New residential construction, which adds heavily to GDP estimates, continues to dip, pushing down growth, creating deeper fiscal consequences.

"As the economy for decades was fuelled by land sales, construction projects, employment, and demand for basic industry goods like steel and cement, it has seen a slow and steady downturn. This downturn further impedes GDP growth," the report noted.

Property investment is expected to shrink by nearly 20 per cent this year, it said, adding that the housing resale information being framed as a “new phase” by officials is a hollow narrative.

“The Chinese presale model, which involved paying for houses years before completion, is an example of market failure. With money locked in for a long period, home buyers found themselves as unwilling creditors to the building companies,” the publication said.

Such an adverse experience pushed many buyers toward existing homes and away from off‑plan purchases, reinforcing the slump in fresh housing investment.

While second‑hand sales could stabilise turnover temporarily, they do not address oversupply or restore the investment that drives construction‑related employment and output, the report clarified.

—IANS

aar/pk