Most people probably haven’t read the recent document released by China’s Housing and Urban-Rural Development Bureau, but it will have a major impact on China’s real estate market—I haven’t seen much discussion about it on Twitter. China is now phasing out pre-sales and transitioning to sales of completed properties. Selling completed homes will likely increase developers’ financial pressure by about one-third and slow land acquisition by a similar margin. A real estate project that previously required 60 million yuan now needs 100 million yuan to complete. Hainan was the first city to pilot completed-property sales, starting around 2021. When I asked Hainan-based developers how they’re selling homes, they said the government has reduced land prices to offset the burden. With cash flow challenges, there are only two options: pass the cost onto buyers, or have the government absorb part of the cost. Hainan chose the latter—now it remains to be seen whether major cities will follow suit. I believe the likelihood of rising property prices in China is very low.