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Second-hand homes priced under CNY 2 million (approximately USD 278,600) are increasingly popular among young buyers and investors in major cities, making up roughly half of all resale property transactions in Beijing and Shanghai.
In Beijing, over 57% of second-hand apartments sold in October were priced below CNY 2 million, rising from 55% the month prior and nearly 53% a year earlier, according to data from China Real Estate Information Corporation. Similarly, in Shanghai, nearly 49% of last month’s resale home sales were below CNY 2 million, up from just over 46% in September and about 40% during the same period last year.
The surge in demand for small second-hand homes in top-tier cities is driven by their suitability for first-time buyers. Cao Jingjing, the general manager of the research department at the China Index Academy, explained that younger individuals just starting their careers often have limited savings, and affordable properties help reduce financial strain.
Most homes priced under CNY 2 million are situated in neighborhoods with convenient access to public transportation, shopping centers, and medical facilities—factors that make them highly desirable among first-time buyers.
The resale housing market is undergoing ongoing price adjustments, with values continuing to fall. This trend not only benefits young buyers but also opens up opportunities for working families who can now afford premium locations at lower prices.
In October, the price index for second-hand residential properties in first-tier cities declined by 1% compared to September and dropped 4.5% year-over-year, according to the E-House China Research Institute.
Meanwhile, as housing prices decline, rental yields on second-hand homes in some districts of leading cities are beginning to recover, attracting investors who purchase affordable properties to lease out. The average rental yield across 50 major Chinese cities increased to 2.08% in the first half of this year from 2.06% last year, primarily because rental prices have been more stable than housing prices, according to data from the Linping Residential Big Data Research Institute.
In Beijing’s Chaoyang district, a local agent reported that 15 to 20 resale apartments are sold each month in the community he manages. Many new owners rent out these units, as after deducting expenses, the overall rental yield has rebounded to around 3-4%.
Properties offering rental yields above 3%, and especially near 4%, remain relatively uncommon. Shanghai market analyst Lu Wenxi noted that while some older homes may now offer more attractive yields due to significant price drops, such properties typically see limited potential for price appreciation. He cautioned that high rental yields do not necessarily guarantee strong long-term investment returns, particularly since high-quality homes continue to be the most sought-after by buyers.
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