Li Tongrong proposed the "3+1" interpretation method, predicting that the housing market will bottom out and expand in three stages. (Photo by reporter Zhu Yuqiao)
When will the housing market correction end? Li Tongrong, a real estate market trend expert, applied the technical analysis logic commonly used in the stock market to the real estate market and established three technical indicators of the real estate market: RE-OBV (market volume energy), RE-BKD (supply and demand momentum), and RE-MACD (price momentum). He observed the price volume energy, supply and demand cycle, and price momentum respectively, and combined them with GDP as a verification of the overall economic fundamentals to form a "3+1" interpretation structure for the housing market.
Based on current model deductions, he predicts that in the second half of 2026, housing market volume will be tepid and prices will decline slowly. In the first half of 2027, volume will rebound and prices will stop falling. The second half of 2027 will be the key time point worthy of attention.
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Li Tongrong pointed out that although GDP is not a technical indicator of the housing market, it can be used to observe the resilience of the housing market and future bull conditions. Real estate prices respond slower than the stock market. When the economy improves, corporate profits and the capital market usually reflect it first. The housing market is also affected by factors such as interest rates, credit controls, financial environment, and policies. Therefore, a strong GDP does not mean that housing prices will rise immediately, but it will help the housing market resist decline.
The economic performance will be strong from 2025 to 2026, with the annual GDP growth rate reaching 15.43% in the first quarter of 2026 and 14.15% in the first half of the year. However, the housing market has not recovered simultaneously. Li Tongrong said that this shows that the current correction of the real estate market is mainly affected by credit control, capital tightening and market wait-and-see, rather than economic recession; when the economic fundamentals are not weak, the real estate market is more likely to show slow decline, resistance to decline, and strength differentiation.
Among the three technical indicators, RE-OBV takes the lead in observing market volume. Li Tongrong pointed out that when the housing market has been idle for a long time, transaction volume usually picks up first and then prices keep up. RE-OBV observes the rise and fall of house prices together with trading volume. If there is a "price drop and volume shrinkage", it means that although house prices are still correcting, the trading volume is no longer deteriorating, and the strength of short sellers may gradually weaken.
According to the current model, RE-OBV has the opportunity to take the lead in recovering in the first quarter of 2027, and capacity and home buying confidence may rebound earlier than housing prices.
RE-BKD observes the construction permit, construction start and usage permit. The construction permit reflects the confidence of the builder, the start of construction represents the actual construction, and the usage permit represents the completion of the housing and the supply entering the market. Since housing supply often takes several years from construction approval to completion, changes in supply and demand cannot only be based on housing prices.
Model deduction shows that construction licenses may be the first to have a golden cross with licenses in the second quarter of 2027, and construction starts will then cross with licenses in the third quarter, indicating that builders' confidence and actual investment are gradually recovering, and the supply and demand structure has begun to improve.
As for RE-MACD, it mainly observes price momentum, which is the final signal among the three indicators to confirm whether the housing market has stopped falling and rebounded. According to the current model, the downward momentum of house prices will continue to converge in the second half of 2026, and will gradually come close to stopping in the first half of 2027. RE-MACD will have a golden cross in the third quarter, and the positive price momentum will further strengthen in the fourth quarter.
Combining GDP and three technical indicators, Li Tongrong predicts that the housing market will go through three stages. In the second half of 2026, it will be "slightly warm, and prices will fall slowly." Credit control and market wait-and-see are still there, but the worst stage of transaction volume may gradually pass; in the first half of 2027, it will be "volume rebounds, prices will stop falling." If R E-OBV takes the lead in correcting, and there is a golden cross between construction and licensing, and market buying momentum and builder confidence will gradually recover; the second half of 2027 will be "increased volume and warmer prices". If construction and licensing, and RE-MACD continue to show signs of strengthening, volume, supply, demand, and price will be further confirmed.
Li Tongrong said that this round of housing market correction is characterized by bearish technical aspects, but the economic fundamentals are not weak. According to the current model, in the second half of 2026, the volume will be slightly warm and the price will fall slowly; in the first half of 2027, the volume will rebound and the price will stop falling; in the second half of 2027, the volume will increase and the price will be warm. The order of strengthening of the three indicators is RE-OBV first, RE-BKD second, and RE-MACD last.
He pointed out that the long-short trend of the housing market is still affected by multiple factors such as economic fundamentals, technical cycles and policy news. The long-term trend is mainly based on economic fundamentals. Technical indicators are mainly used to judge the mid-term housing market trend. In the short term, it may still be affected by changes in policies and news. Therefore, the "3+1" structure can be used as an important reference for observing the long and short trends and turning points of the housing market.
