China's 2026 property reforms: who finances a home before it's built?
China now wants homes sold after they are built, and presale mortgages paid out only on completion. What that shifts, and what it means for buyers in India.
In August 2026, China began moving its housing market away from presales and toward selling homes after they are built. New presale projects must now top out each building first, and mortgages on presold homes are to be released only once completion is registered. The effect is to move construction-financing risk away from homebuyers and onto developers and lenders.
That shift is getting less attention than falling property prices, but it changes something basic: the way a home gets financed while it is still being built.
For years, housing presales were a major part of China’s property market. Developers could sell apartments before completion, meaning money from buyers entered the project while construction was still underway.
It isn’t an unusual model. But it creates an interesting dependency:
The developer needs money to build the project, while the buyer is putting money into a project that depends on the developer being able to finish it.
China’s property crisis showed what happens when that chain breaks. Some developers ran into severe funding problems, and some presold projects were left unfinished. For homebuyers, what looked like a normal property transaction suddenly became a much bigger question:
Who is actually carrying the construction risk?
What are China’s new property rules in 2026?
On 29 August 2026, the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources and the National Financial Regulatory Administration jointly issued a circular reforming the commercial housing sales system (Global Times).
One of the biggest changes is a push toward completed home sales: selling homes after they are built, so that buyers “get what they see”, rather than relying as heavily on presales (CGTN).
Has China banned housing presales?
No. China has not banned presales.
Instead, the new measures encourage completed home sales while imposing tighter conditions and supervision on projects that continue to sell homes before completion. For new presale projects, the main structure of each building must be topped out before sales begin, and presale funds face stronger supervision.
What changed on the financing side?
A separate guideline from the People’s Bank of China and the National Financial Regulatory Administration changes when mortgage money arrives. For presold homes, lenders are to wait until the project’s completion has been formally registered before disbursing the mortgage, instead of the earlier topping-out stage (China Daily).
That last part is particularly interesting.
If developers cannot depend as heavily on buyer and mortgage money during construction, they have to find more financing elsewhere, through their own capital or development finance.
In other words, some of the construction-financing risk moves away from the homebuyer and toward the developer and the financial system.
But that creates a tougher financing environment for developers too.
Why does this matter for homebuyers?
The difference between buying a completed home and buying one that is still being built is not just about possession. It is also about who is carrying the financial risk during construction.
With a completed home, the developer has already financed the construction. The buyer is purchasing an asset that already exists.
With a presale, the buyer commits money before the final product exists.
That doesn’t automatically make presales bad. They can offer buyers earlier access to projects, more choice of units and different payment structures. But they also mean the buyer is relying on the developer to complete the project after the purchase has already been made.
China’s property downturn made that dependency much harder to ignore.
What does this mean for buyers in India?
India sells a large share of new homes the same way, before they are built. The Real Estate (Regulation and Development) Act, 2016 (RERA) was India’s answer to the same dependency: under Section 4(2)(l)(D), developers must deposit 70% of the money collected from buyers in a separate account that can be used only for that project’s land and construction costs.
That ring-fences buyer money. It does not remove the dependency on the developer finishing the building, and it does not remove the question of whether the finished building is lawful to occupy.
A resale or ready-to-move home answers both questions before you pay. The building exists, and you can check whether it has an Occupancy Certificate rather than trusting that it will get one. If you are weighing the two in Bengaluru, start with ready-to-move flats for sale in Bengaluru and the documents to check before buying.
The bigger question
China’s reforms are ultimately raising a question that goes beyond one country’s property market:
When a home is sold before it is finished, how much of the construction risk should sit with the buyer?
Moving toward completed-home sales can reduce the buyer’s exposure to construction and delivery risk. But if developers have to finance more of the construction themselves, the pressure simply moves somewhere else.
Developers need more capital. Lenders take on a different role. Projects can become more expensive to finance. Some developers may find it harder to start or complete projects.
So the risk doesn’t disappear. It moves through the system.
That may be the most interesting part of China’s property reforms. The debate isn’t simply about whether homes should be sold before or after construction. It is about who finances a home before it exists, and who carries the risk if something goes wrong.
Because when you buy a home that is still being built, the most important question may not just be: “What am I paying for it?”
It may be: “Who is carrying the risk until I get the keys?”
Frequently asked questions
Has China banned housing presales?
No. The August 2026 circular encourages sales of completed homes but still allows presales under tighter conditions: for new projects, the main structure of each building must be topped out before presale, and presale funds face stronger supervision.
What changed for mortgages on presold homes in China?
A separate guideline from the People's Bank of China and the National Financial Regulatory Administration says lenders should release mortgages on presold homes only after the project's completion is formally registered, rather than at the earlier topping-out stage.
Why does selling completed homes shift risk away from buyers?
With a completed home, the developer has already financed construction and the buyer pays for something that exists. With a presale, the buyer's money funds a building that still has to be finished, so the buyer carries part of the delivery risk.
How are under-construction homes protected in India?
Under the Real Estate (Regulation and Development) Act, 2016, developers must deposit 70% of the money collected from buyers in a separate project account that can be used only for that project's land and construction costs. Buying a ready home with an Occupancy Certificate avoids construction risk altogether.