China Index Research Institute: The scale of housing enterprise bond financing increased markedly in the first half of the year, and the formation of a multi-level REITs market accelerated

The Zhitong Finance App learned that the China Index Research Institute issued an article stating that in the first half of 2026, total bond financing increased year-on-year and stabilized at a low base. However, the root cause of the continued decline in the scale of financing for housing enterprises in the past was the continuous contraction driven by the market downturn, so the current steady trend is not stable. Credit bonds are still the absolute main force in issuing and financing, and central state-owned enterprises are the absolute main issuers. In particular, the scale of issuance by local state-owned enterprises has increased significantly. Overseas bonds have grown from a low level and are still being issued in small quantities. The first batch of commercial real estate REITs was successfully listed, and the share of ABS financing increased, with CMBS/CMBN and REITs supported by underlying assets accounting for nearly 80%.

The scale of bond financing: increased by more than 20% year-on-year in the first half of the year, stabilized at a low base

In the first half of the year, total bond financing increased year on year, showing a steady trend. Due to the impact of the low base effect, the year-on-year growth rate of financing was positive. Although there were fluctuations year-on-year in a single month, the cumulative scale continued to grow positively. However, this steady trend is not stable. First, capital is mostly used to repay existing debts, so the scale of debt issuance is affected by the scale of debt repayment; second, debt issuance requires projects under construction or underlying assets, and the scale of issuance is constrained by high-quality assets. However, the root cause of the continued decline in the financing scale of housing enterprises in the past was the continuous contraction driven by the market downturn. Currently, the real estate market is still bottoming out, and the scale of bond financing is still constrained.

Figure: Financing amount and year-on-year ratio from January to June 2026

The financing scale statistics are based on the date of issuance. The scope of the statistics is “real estate management and development”, including credit bonds, overseas bonds, and ABS

Data source: Middle Index Data CREIS

Credit bonds are still the absolute main source of financing. Overseas bonds have recovered at a low level, with ABS financing accounting for nearly 40%. From January to June 2026, the total amount of bond financing in the real estate industry was 315.88 billion yuan, an increase of 21.7% over the previous year, and the growth rate hit a new high in recent years. Looking at the financing structure, credit bond financing was 176.61 billion yuan, up 11.8% year on year, accounting for 55.9%; overseas bond financing was 17.17 billion yuan, up 199.4% year on year, accounting for 5.4%; ABS financing was 122.10 billion yuan, up 27.5% year on year, accounting for 38.7%.

Figure: Financing structure from January to June 2025 and January to June 2026

Data source: Middle Index Data CREIS

Judging from the funding available to real estate development companies, the scale continues the downward trend since 2022, and the actual financing environment has not improved significantly. From January to June 2026, real estate development enterprises received 4023.3 billion yuan in capital, a year-on-year decrease of 20.2%. Among them, domestic loans amounted to $571.6 billion, a decrease of 31.7%; self-financing of $1474 billion, a decrease of 16.4%; deposit and advance payments of $1244.2 billion, a decrease of 15.8%; and personal mortgage loans of $513.7 billion, a decrease of 24.9%.

Financing structure: Credit bonds are still the absolute main force in issuing financing, and central state-owned enterprises are the absolute main issuers

Credit bonds: Central state-owned enterprises are the absolute main issuers, and local state-owned enterprises drive the growth in the scale of issuance in the industry

In 2026, the real estate industry's credit bond issuance scale was 177.61 billion yuan, up 11.8% year on year, accounting for 55.9% of the total bond financing scale, down 5.0 percentage points from the same period last year. The average issuance period is 3.44 years, and the period has been shortened. Looking at a single month, the scale of credit bond issuance continued to fluctuate in the first half of the year.

Judging from the issuance structure, the issuers of credit bonds are mainly state-owned enterprises and local state-owned enterprises. In the first half of the year, central state-owned enterprises issued 95.3%, up from the same period last year; the share of issuance by private enterprises and mixed ownership enterprises declined. The scale of credit bond issuance by local state-owned enterprises increased significantly in the first half of 2026. First-run and pioneer enterprises issued more than 10 billion yuan, and enterprises such as Su Gaoxin, Lujiazui, and Chinese enterprises issued more than 4 billion yuan. The increase in the scale of issuance by local state-owned enterprises has also led to an increase in the scale of credit bonds issued by housing enterprises. In the first half of 2026, private enterprise debt issuance remained low. The number of private enterprises issuing bonds and mixed ownership enterprises was 6. Basically, they were large-scale enterprises that had not yet taken risks, making it difficult to benefit most private enterprises with tight financial resources.

Figure: Financing structure from January to June 2025 and January to June 2026

Data source: Middle Index Data CREIS

Poly Development Holding Group Co., Ltd. plans to issue convertible corporate bonds to specific targets. The total capital raised will not exceed RMB 5 billion for nine real estate development projects in core cities including Shanghai, Hangzhou, Guangzhou and Foshan. The registration approval was approved by the Securities Regulatory Commission. Long-term capital, which also has the characteristics of equity instruments, will help companies improve their balance sheets.

Foreign bonds: growing from a low level and still being issued in small quantities

In 2026, the overseas bond issuance scale was only RMB 17.17 billion, a significant increase over the previous year, accounting for 5.4% of the total financing scale, an increase of 3.2 percentage points over the same period last year; the average issuance period was 3 years, and the issuance period was long. In terms of issuing companies, they are mainly central state-owned enterprises such as Yuexiu, Zhonghai Hongyang, Greentown and Xincheng, high-quality private enterprises, and mixed ownership enterprises. The increase in their distribution scale has driven the scale of the industry.

ABS: The share of financing has increased, with CMBS/CMBN and REITs supported by underlying assets accounting for nearly 80%

In 2026, ABS financing accounted for 27.5% of the total financing scale, up 1.7 percentage points from the same period last year, and is becoming more important in bond financing. The average issuance period was 17 years, which was significantly extended. Looking at a single month, the distribution scale of ABS fluctuated greatly in the first half of the year, and the distribution scale was driven by policies and constrained by high-quality assets. Judging from the distribution structure, REITs and CMBS/CMBN became the main distribution types, accounting for 41.6% and 36.3% respectively.

Figure: ABS distribution structure for the first half of 2026

Data source: Middle Index Data CREIS

The commercial real estate REITs pilot was launched, the first batch of commercial real estate REITs was successfully listed, and the path to commercial stock revitalization increased. On December 31, 2025, the China Securities Regulatory Commission introduced a policy clearly stating that it wants to “promote the stable and healthy development of commercial real estate REITs”, stating that “promoting the development of the commercial real estate REITs market is an important measure of the capital market to implement the decisions and arrangements of the Party Central Committee and the State Council on 'revitalizing stock, improving increment' and 'increasing the proportion of direct financing', and an effective means of supporting the construction of a new model of real estate development through market-based mechanisms.” At the same time, it was proposed to “focus on supporting the issuance of commercial real estate REITs in line with policy orientation and commercial attributes to improve the efficiency of issuance and listing. REITs are encouraged to hold asset portfolios with similar business formats, complementary functions or operational collaboration, promote cross-sector asset integration, and enhance scale effects and risk diversification capabilities.” In June, the first batch of commercial real estate REITs was successfully listed. The underlying assets of the 4 commercial real estate REITs were distributed in core cities such as Beijing, Shanghai, and Xi'an. The business format covered outlets, office buildings, and commercial complexes. The original shareholders were Shounong, cedar, sand boats, and Shanghai real estate, covering local state-owned and private enterprises. Up to now, a total of 22 commercial real estate REITs have been declared. The industry expects the overall capital raised to exceed 70 billion yuan, which will further revitalize existing commercial assets.

ABS products for holding real estate were implemented at an accelerated pace, the “CITIC Securities - China Resources Commercial Asset Holding Real Estate Asset Support Special Program” was established, and the “Guojin Asset Management - Wuyue Plaza Holding Real Estate Asset Support Special Program” was expanded. Overall, during the year, ABS product types were still dominated by those supported by high-quality underlying assets, and the ABS channel was always open to companies with high-quality holding assets.

Conclusion: The multi-level REITs market is being formed at an accelerated pace, and fine operation is king

As the industry's financing cash inflow shifts from mainly entity financing to mainly project financing, linking debt repayment sources to specific projects, and fixing the mismatch of “short-term debt long-term investment” terms in the market in the past, policies such as the “white list” mechanism and public REITs are still being implemented at an accelerated pace. Specifically, on January 9, the regulatory authorities issued the latest policy guidance on the real estate financing coordination mechanism. The core of this is that loans for real estate “white list” projects can be extended for 5 years if eligible. It is expected that under the “white list” system, domestic loans will still form an important support for the funds available to housing enterprises. In the first half of the year, the launch of commercial real estate REITs promoted the formation of a “traditional infrastructure+commercial real estate” two-wheel drive development pattern in the public REITs market, and formed a multi-level REITs market with holding ABS. The introduction of commercial real estate REITs has improved the closed loop of the entire “investment, finance, construction and management withdrawal” chain in the real estate industry, truly opened up space for enterprise development in the field of professional operations, and laid an important foundation for building a new model of real estate development.

Leading central state-owned enterprises and private enterprises are exploring innovative financing channels such as public REITs and ABS for holding real estate, which can not only revitalize existing assets, but also enrich the inflow of financing capital. Up to now, housing enterprises such as China Resources, China Merchants, Jinmao, and CNOOC have all issued public REITs domestically. Meanwhile, housing enterprises such as Poly Development, Xincheng Holdings, China Merchants Shekou, China Resources Land, and Galaxy Group actively apply for commercial real estate REITs. REITs form a positive cycle of high-quality credit, steady management, and fine operation, and continue to reinforce the corporate credit moat.