Tighter rules for home presales will safeguard buyers

Editor's note: Three government departments have jointly issued a circular to reform the country's commercial housing sales system and advance a new development model for the real estate sector. China Central Television spoke to Li Yujia, chief researcher at the residential policy research center of Guangdong planning institute, and Yu Xiaofen, dean of the academy of housing and real estate at Zhejiang University of Technology, on the importance of the move. Below are excerpts of the interviews. The views don't necessarily represent those of China Daily.

There are two different models of property sales: sales of completed homes and presales of under-construction property. Sales of completed homes mean that buyers pay for a home ready for occupation, while under the presale model, developers sell homes even before construction has been completed.

In recent years, homebuyers have increasingly preferred to buy completed houses. Most people want to see exactly what they are buying before they commit financially. As a result, the share of completed homes in total housing transactions nationwide rose from 13.9 percent in 2022 to 32.4 percent in 2025.

The rules for the presale of property have now been changed. Commercial housing projects can obtain a presale permit only if the main structural work of each individual building has been completed. Moreover, all payments from homebuyers, including down payments and personal housing loans, must be deposited into supervised accounts to safeguard these funds.

This shift toward completed homes will promote the supply of better-quality housing and cultivate higher-quality development of the real estate sector. But the transition will not happen overnight. New housing projects with construction permits will adopt the completed homes model while existing projects will continue to operate under the presale system.

Uniform criteria such as a completion certificate and access to basic utilities will be used to determine whether a home is ready for sale. This will help prevent pseudo-completed homes and reinforce the principle of "what you see is what you get".

In the past, the presale model enabled developers to quickly recover their investments and expand housing supply at a faster pace, effectively easing the shortage of urban housing. However, as the supply-demand dynamic has changed, the problems associated with the presale system can no longer be ignored. The most prominent issue is delayed delivery of commercial housing, which undermines homebuyers' rights and interests.

In the long term, the changes will enhance housing quality, mitigate risks in the property sector, encourage developers to follow prudent practices and ensure higher-quality development of the industry as a whole.

The ready-to-move-in sales model means that real estate developers will bear the financial pressure of the entire construction cycle themselves, compelling them to deepen their presence in local markets, refine product quality, improve supporting facilities and property services, and accelerate industry consolidation through natural selection.

A focus on sales of completed homes will also encourage developers to continuously assess local housing demand and how consumer needs are changing. These insights can then be reflected in future housing projects, ensuring that they meet the actual needs of buyers. This is an important aspect of the transition toward a new model of real estate development.