On May 1st, the “Residential Project Standards” will officially come into effect. This means that requirements such as “residential floor height no less than 3 meters,” “elevators installed in residential buildings with four or more floors,” and “each residential unit having rooms meeting daylight standards” will become mandatory criteria and entry thresholds for newly constructed housing.
Cities and regions across the country, including Beijing, Shanghai, Shenzhen, Guangdong, Chengdu, and Hangzhou, have already introduced relevant policies. These policies aim to enhance the quality of new homes by improving standards for aging-friendly and green energy efficiency, reducing areas counted as shared spaces to increase usable floor area, increasing floor height, expanding balcony area ratios, and measuring the dimensions of interior spaces in fully furnished homes, among other dimensions.
With the central and local governments intensively rolling out multiple high-quality housing construction standards, how can the implementation of “good housing” be tailored to local conditions? How will the introduction of “good housing” affect the pricing and market sales of new homes?
The Standards for “Good Housing”
According to the “Residential Project Standards” (hereinafter referred to as the “Standards”), residential construction projects should aim for safety, comfort, sustainability, and smart technology.
“These four target dimensions essentially combine progressive demand levels with technological empowerment. However, during implementation, contradictions may arise between different dimensions due to technical adaptability, cost control, or differences in group needs,” Wang Yeqiang, Director of the Real Estate Committee of the China Urban Economics Association, told Yicai in an interview.
He cited examples such as increasing floor height to 3 meters to improve spatial perception but also adding to the building’s weight; thickening walls or installing soundproofing materials to meet noise insulation requirements, which may reduce interior space; and smart home systems (e.g., voice control, automatic sensors) posing operational challenges for elderly residents, potentially diminishing their comfort if the interfaces are overly complex. While green technologies like photovoltaic roofs and constant temperature/humidity systems reduce energy consumption, their initial installation costs may drive up housing prices.
To avoid these contradictions, Wang Yeqiang believes it is necessary to shift the industry from “single-point breakthroughs” to “system integration” after the implementation of the Standards. A tiered product system—”basic, aging-friendly, and high-end”—should be established, with different technical modules configured for different demographic needs to meet varying demands for “good housing.”
You Rui, General Manager of China Overseas Property Innovation Research Institute, told Yicai in an interview that whether it’s older homes, subsidized housing, or improved housing, people’s living demands for “good housing” show no significant differences. Subsidized housing must also qualify as good housing, and its fundamental safety requirements cannot be compromised.
A representative from China State Construction Engineering Corporation (CSCEC) told Yicai that the company has identified 172 needs based on over 60,000 resident surveys and customer feedback from the past five years. These were further refined into 101 high-priority core needs that address over 95% of residents’ pain points, categorized by urgency and frequency.
These core needs include issues such as “waterlogging in the community during heavy rain,” “balcony railings being too low, posing safety risks,” “dim lighting in hallways,” “data security and privacy concerns with smart home systems,” “cracks in walls,” “poor indoor air circulation,” “high energy consumption in heating and cooling systems,” and “long wait times for elevators in high-rise residences.”
After the revision of the “Residential Project Standards” was completed, the Ministry of Housing and Urban-Rural Development (MOHURD) published an article in late March mentioning that it is “currently compiling the ‘Good Housing Construction Guidelines.'” In this regard, Wang Yeqiang suggested further refining the Standards in three areas: spatial comfort, age-friendliness and aging-friendly modifications, and green, low-carbon, and smart technology applications. For example, beyond requiring “floor height no less than 3 meters,” additional standards could specify minimum window areas for different unit types and natural ventilation path designs to address issues like the oppressive feeling in high-rise homes and low ventilation efficiency.
Impact on Housing Market Volume and Pricing
As local standards for high-quality housing development gradually take effect, more new housing projects marketed as “good housing” are entering the market.
According to CRIC statistics, in February 2025, new-standard residential products represented by “fourth-generation homes” were gradually being implemented in several core second-tier cities, with sales performance generally outperforming non-new-standard projects in the same regions.
Feng Bo, Deputy Director of the Chengdu Urban Construction Development Research Institute, told Yicai that the city introduced the “Chengdu Urban Planning and Management Technical Regulations (2024)” in June last year. In mid-April this year, the “Sichuan Good Housing Evaluation Standards” were released. These local standards provide localized requirements for real estate developers on how to build “good housing” projects. Against this backdrop, newly developed commercial housing in the region that adheres to the new residential planning and design standards (good housing standards) is more popular among buyers.
In cities like Shanghai and Beijing, You Rui noted that high-quality properties generally have a market advantage in terms of sales volume and pricing, recently demonstrating both price and sales appeal, with some even achieving “sell-out within 90 minutes of launch.”
“‘Local standards exceed national standards, and corporate standards exceed local standards.’ The implementation of the new ‘Residential Project Standards’ has little impact on the development and construction of properties by quality developers. However, from the update of national standards to local policies optimizing ‘good housing,’ market education on quality housing is gradually taking shape,” You Rui said. In her view, the implementation of the new national standards and the overall upgrade in housing quality will not necessarily reduce the advantages of leading developers.
From the buyers’ perspective, their primary concern is “how much the improvement in housing quality will affect prices.”
Wang Yeqiang estimates that, in the short term, newly constructed “good housing” may see an 8%-12% increase in construction and installation costs due to technological investments (e.g., prefabricated construction, green materials). As “good housing” enters the market more rapidly, the average price of new homes in some cities is expected to rise by 5%-8%, which could somewhat impact first-time buyers. He suggests adopting a product-tiering strategy to precisely match the needs of groups with different purchasing power, thereby meeting demand for improved housing while avoiding squeezing the first-time buyer market.
“Additionally, with the adoption of innovative techniques like prefabricated finishes and BIM technology, construction periods can be shortened, and long-term maintenance costs reduced, potentially enabling basic quality assurance for small and medium-sized units within limited budgets,” Wang Yeqiang said.
In You Rui’s view, in price-sensitive first-time buyer markets, the overall improvement in the quality of entry-level or subsidized housing will have little impact on sales prices. “Taking subsidized housing as an example, we estimate the increase in sales prices would be within 50 yuan per square meter.”
The additional costs are manageable, You Rui believes, because achieving “good housing” standards often does not involve innovating existing housing quality benchmarks or changing materials but rather requires developers to be more meticulous and thoughtful during construction, with stronger integrated control across all dimensions. For instance, during construction, whether window openings are properly managed or whether water leakage tests are conducted later, and whether minor issues during construction can be remedied through post-construction maintenance.
Furthermore, Wang Yeqiang pointed out that new residential properties will surpass existing homes in dimensions like floor height, soundproofing, and smart technology. Attention should be paid to whether the listing cycles for some older second-hand homes will lengthen. In response, on one hand, urban village renovations, elevator installations, and aging-friendly modifications can enhance the functionality of existing homes, partially narrowing the quality gap between old and new properties. On the other hand, policy guidance can encourage the inclusion of existing homes in the rental market, converting them into subsidized rental or talent apartments, thereby alleviating pressure to sell such properties directly.