Goldman Sachs Expert: China's New Home Supply May Face 12-to-18-Month Shortage Starting March 2027
nashnova research
E-House president Ding Zuyu told a Goldman Sachs expert call that China's shift to completed-home sales will create a 12-to-18-month new-home supply gap from March 2027 to September 2028 — a fundamental anchor for the recent property rally.
What exactly did the policy change?
The housing ministry declared property has entered a resale-dominated era; new projects must prioritize completed-home sales, and presale funds face tighter escrow rules.
This means → developers can no longer sell units while still pouring concrete. The home must be built — or nearly built — before it can be sold.
The data back this up: resale transactions rose from 27% of total sales in 2020 to 52% in the first eight months of 2026, crossing the 50% mark for the first time.
In plain terms = buyers were already voting with their wallets — more than half now choose resale — and the policy simply formalized the trend.
How does the supply squeeze play out?
Short term (now through Chinese New Year 2027): developers rushed to secure presale permits before the August 28 deadline, so inventory holds up and supply roughly meets demand.
Mid-term (March 2027 – September 2028): new land parcels require structural topping-out before presale; mortgage funds release only after completion. Developers lose the incentive to build fast, and available new-home inventory drops sharply.
Long term: developers gradually adapt; supply rhythm re-stabilizes; resale volume fills more of the gap.
This means → the real supply "dead zone" is that 12-to-18-month mid-term window — the make-or-break period for the property thesis.
Who benefits most?
Ding sees mid-tier state-owned developers best positioned — moderate scale, stable state backing, and historically disciplined expansion.
This reflects a squeeze from both ends: large SOEs are pulling back on land purchases while weaker private developers exit, leaving the middle tier with room to grow.
Strong regional developers may also gain: they can deepen dominance in lower-tier cities, with some pushing local market share above 20%.
How does the developer playbook change?
The priority shifts from "race to presell" to "race to complete": completion cycles for sub-18-story buildings could compress to roughly 18 months, and sub-11-story to about 12 months.
In plain terms = the old game rewarded whoever sold fastest; the new game rewards whoever builds fastest and builds best.
Marketing loses weight; market research and product development gain it — product quality becomes the new competitive moat.
How credible is this call?
Whether the supply gap materializes on schedule in March 2027 — and lasts as long as projected — is the key test for the current property-rally thesis.
Ding expects primary-market sales to post clear year-on-year growth in Q4, with the traditional autumn selling season holding firm.
This means → if near-term data keep improving, the market will lean toward trusting the mid-term supply-gap thesis; a miss would force a reassessment.
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