More Chinese cities reported month-on-month increases in new home prices in January and tier-2 cities saw their first increase in new home prices since June 2023, according to data released by the National Bureau of Statistics (NBS).
Among the country’s 70 major cities, Nanjing and Chengdu recorded the highest monthly increase in new home prices for the second consecutive month, while Shanghai’s second-hand home prices led the nation for the second month in a row.
Industry insiders believe that the rise in new home prices in tier-2 cities following the increases in tier-1 cities suggests a strengthening momentum for market stabilization and improvement, which, in turn, is expected to further shape market expectations and support the emergence of a “mini spring” in the real estate sector in the first quarter.
Second-Tier Cities See First Monthly Increase in New Home Prices
New home prices in China’s four first-tier cities rose by 0.1% month-on-month in January, though the pace of increase slowed by 0.1 percentage points from the previous month, showed the data. Among them, Beijing saw a decline of 0.4%, Guangzhou’s price remained flat, while Shanghai and Shenzhen recorded increases of 0.6% and 0.2%, respectively.
Second-tier cities saw a 0.1% month-on-month increase in home prices, reversing from a flat reading in the previous month, while new home prices in third-tier cities fell by 0.2%, in line with the decline as in the previous month.
For second-hand homes, prices in first-tier cities rose by 0.1% month-on-month, though the pace slowed by 0.2 percentage points from the previous month, with Beijing, Shanghai, and Shenzhen recording increases of 0.1%, 0.4%, and 0.4%, respectively, while Guangzhou seeing a decline of 0.2%.
Second-tier cities saw a 0.3% month-on-month decline in second-hand home prices in January, while third-tier cities saw a 0.4% decline, both in line with the previous month.
In total, 24 out of the 70 cities saw an increase in new home prices in January, one more than the previous month. Nanjing and Chengdu led with a 0.7% rise, followed by Shanghai and Ningbo at 0.6%, and Wuhan and Wuxi at 0.5%.
For second-hand homes, seven cities recorded price increases, two fewer than the previous month. Shanghai and Shenzhen led with a 0.4% increase, followed by Ningbo at 0.3%, while Chengdu and Wuxi both saw a 0.2% increase.
Year-on-Year Declines Narrow as Market Shows Signs of Stability
Looking at year-on-year data, home prices in all city tiers saw narrowing declines in January.
First-tier cities recorded a 3.4% year-on-year decline in new home prices, narrowing by 0.4 percentage points from the previous month. Beijing, Guangzhou, and Shenzhen saw declines of 5.7%, 8.4%, and 5.2%, respectively, while Shanghai posted a 5.6% increase.
Second-tier cities saw a 5% year-on-year decline, narrowing by 0.4 percentage points from the previous month, while third-tier cities saw a 6.0% year-on-year decline, narrowing by 0.2 percentage points, showed the data.
For second-hand homes, first-tier cities saw a 5.6% year-on-year decline, narrowing by 1.1 percentage points from the month before, with Beijing, Shanghai, Guangzhou, and Shenzhen posting declines of 3.8%, 2.3%, 10.0%, and 6.1%, respectively.
Second-tier cities saw a 7.6% year-on-year decline in second-hand home prices, narrowing by 0.3 percentage points, while third-tier cities saw an 8.2% decline, narrowing by 0.2 percentage points.
Growing Momentum for Market Stabilization
Yan Yuejin, Deputy Director of E-House China Research Institute, said that China’s home prices in January continued the stabilization trend seen in Q4 2024, with clear signs of price stabilization, and in particular, after first-tier cities saw price increases, second-tier cities have now followed suit, signaling stronger momentum for market stabilization.
“The improvement in price indicators is closely related to the positive market activity in January. It also shows that, under favorable policies, the market fundamentals are continuously improving,” Yan said.
Zhang Dawei, Chief Analyst at Centaline Property, also noted that the impact of policy measures over the past few months has been significant, and based on price data, there are clear signs that overall home prices have stopped declining, adding that since October 2023, the number of cities experiencing price drops has been steadily decreasing.
According to Yan, given that January is traditionally a low season for home sales, the increase in the number of cities with rising prices is noteworthy, which further suggests that market expectations are improving, and upward momentum in home prices is strengthening.
Outlook: Positive Start with Continued Policy Support Needed
Looking ahead, Yan believes that January’s home price data indicates a strong start to the year, and the shift in price trends in first- and second-tier cities is a significant signal, helping to guide market expectations and support the ongoing recovery of the real estate sector.
Zhang emphasized that additional strong policy measures will be necessary to sustain the momentum and expected the market to see a seasonal rebound in March, with the potential for a “mini spring” in the housing sector.