Major Chinese cities signs of stabilization in home prices, with second-hand home prices falling at a slower pace and new home prices increasing, after the latest housing policy easing boost market confidence.
The average price of second-hand homes in China’s 100 major cities stood at 14,360 yuan per square meter in October, falling by 0.6% month-on-month, narrowing by 0.10 percentage points from September, and sliding by 7.27% from a year earlier, according to data from real estate research firm China Index Academy.
During this period, core cities saw an increase in second-hand homes transactions, with property owners’ bargaining power diminishing, leading to a narrower decline in second-hand home prices it said.
In tire-one cities, the average second-hand home price fell by 0.17% month-on-month, narrowing sharply by 0.64 percentage points from September, with Shenzhen seeing a marginal decline of just 0.05%, marking the most pronounced improvement.
Following the latest housing policy easing announced on September 29th, Shenzhen’s second-hand home transactions surged and hit the highest since April 2021, leading to signs of price stabilization, while in Beijing, transaction volume exceeded 16,000 units in October, marking a new high since April of 2023, with the month-on-month price drop narrowing sharply to 0.29%.
In second-tier cities, the average price of second-hand homes fell by 0.70% month-on-month, with cities like Chengdu, Chongqing,and Xi’an seeing a smaller decline in prices, while Qingdao, Suzhou and Nanjing still facing larger month-on-month price drops.
In the primary housing market, the average new home prices in the cities reached 16,532 yuan per square meter, marking a month-on-month increase of 0.29% and a year-on-year rise of 2.08%.
In breakdown, new home prices in first- and second-tier cities rose by 0.69% and 0.17% month-on-month, respectively, driven by a faster pace of project launches by developers and the entry of high-quality improvement projects into the market, contributing to structural price growth in home prices, while in contrast, new home prices in third- and fourth-tier cities saw a slight decline of 0.02% month-on-month.
As market expectations recovered after the policy shift and property developers stepped up property launches and marketing efforts, several key cities saw significant month-on-month growth in new home sales driven by the introduction of high-quality improvement projects, leading to structural price increases for new homes, said the academy.
In addition, the average residential rents across China’s 50 cities stood at 35.9 yuan per square meter per month in October, falling by 0.63% from the previous month and sliding 3.03% from a year earlier, according to the data.
October marked the gradual onset of the traditional off-peak season for the housing rental market, with market demand receding, resulting in a slight decrease in average rental prices in major cities, it said.