China Property Signals (#42): Inventory Levels Are Coming Down, But Pace Of Clearing Is Slow On Weak Sales (49 Cities)

About this Newsletter: Get a quick but more granular view of (still) one of the most important sectors in China, with the weekly chart and commentary from Real Estate Foresight (REF) - drawing on 14+ years of REF's research on China housing markets.

The pace of inventory clearing (months-to-clear) for 49 cities where we do have reasonable data has deteriorated in 2026 and remains at the worst levels in history (the orange line in the chart below).

However, this is driven by weak new home sales, as the absolute level of inventory (for the same cities) has actually come down (the grey bars):

What we measure here is the 'available for sale' inventory, a mix of completed units available for sale and the units under construction that already have a permit to sell. Based on CREIS data.

The decline in inventory levels is a function of new home sales (given limited new starts), but could also be affected by schemes where state-linked entities can purchase units (towers/projects) from developers for affordable housing.