In a significant shift aimed at addressing long-standing issues in China’s property market, authorities have introduced new measures that restrict the presale of new homes until construction reaches a more advanced stage. These rules, effective from August 28, reflect Beijing’s efforts to reduce risks associated with unfinished housing developments, a problem that has persisted amid the country’s prolonged property downturn.

Under the updated regulations, residential projects must prioritize the sale of completed homes. Presales are now permitted only after the main structure of a building—a stage known as "topping out," which includes the completion of the frame and roof—is finished. This marks a departure from previous policies allowing presales much earlier in the construction process, typically once only a quarter of the planned investment was spent. The government is also tightening control over home buyers’ payments to curb the financial hazards that arose under the earlier model.

The move is partly a response to high-profile crises, notably the collapse of Evergrande, once China’s largest property developer. The company’s extensive borrowing and aggressive presale practices contributed to a wider property sector crisis, leaving many projects stalled and buyers in limbo. Evergrande’s founder, Hui Ka Yan (also known as Xu Jiayin), was sentenced to life imprisonment earlier this month for crimes including financial fraud and bribery, underscoring the serious consequences of the previous high-risk approach.

Homebuyers like Wang Conghui, who purchased a presale apartment on the outskirts of Zhengzhou in 2019, illustrate the human impact of these difficulties. Wang and her family have lived in their unit since mid-2025 despite incomplete landscaping, unfinished common areas, and a lack of essential amenities. They still await a formal property ownership certificate from the financially troubled developer, Henan Yishenghe, which is necessary to legally establish ownership and enable resale. Their experience underscores challenges faced by many buyers caught in stalled developments.

To provide some relief to buyers, mortgage terms have also been extended from 30 to 40 years, potentially lowering monthly payments, though total interest costs may increase. However, experts caution that these policies are not designed as immediate stimulus measures to boost housing demand, which continues to be weighed down by declining price expectations, softening income growth, and demographic trends.

Analysts note the new rules will reshape the financing framework for developers, who have long relied on presale proceeds as critical working capital. This source of funding, once accounting for about one-third of financing two decades ago, has already declined to under 20 percent. The overhaul aims to reduce risky “rinse and repeat” practices where developers used presales to fund new projects, but it may also raise challenges for smaller firms lacking access to traditional capital markets.

According to Moody’s, the reforms should ease delivery risks and foster a more sustainable, less leveraged property market over the next two to three years, though pressures on funding will vary across the sector. Industry experts emphasize the importance of a gradual transition to protect developers and financial institutions from sudden cost increases.

While the shift to completed-home sales could enhance buyer confidence over time, some observers highlight that purchasing decisions will remain influenced by affordability, delivery certainty, and broader economic conditions. As Wang’s story demonstrates, many buyers are still coping with the legacy of the prior model, often taking matters into their own hands to establish some sense of security amid unfinished developments.

China’s real estate adjustment reflects a complex balancing act between curbing systemic financial risks, restoring market trust, and managing the sector’s vital role in the national economy. The new policies mark a pivotal step in this ongoing transformation.