Executive Summary
China’s real estate market in key cities such as Beijing and Shanghai showed signs of a “minor spring” recovery in March. Although Q1 transaction volumes remained below 2025 levels, second-hand housing in top-tier cities rebounded strongly, and new home sales posted modest gains, supporting price stabilization. Nationwide, average new home prices rose slightly, while second-hand home prices continued to decline, albeit at a slower pace. The recovery has been driven by sustained government policies to stabilize the market, improved buyer expectations, and selective inventory management.
After the seasonal slowdown over the Spring Festival holiday, real estate markets in major cities finally welcomed the expected “minor spring” rebound in March.
Data from the China Index Academy shows that the real estate market started the year on a stable footing. Although Q1 transaction volumes remained below those of the same period last year, activity in key cities has rebounded noticeably since March. In particular, Beijing and Shanghai, despite last year’s high base, have continued to see growth in second-hand housing transactions, reinforcing their leading role in the market.
In March, average new home price across 100 major cities reached 17,115 yuan per square meter, marking a modest month-on-month increase of 0.05%. The average price of second-hand homes was 12,792 yuan per square meter, down 0.34% month-on-month, with the rate of decline narrowing for the third consecutive month.
Analysts note that despite numerous favorable factors, the market recovery remains tentative, with ongoing policy support still essential. Meanwhile, the market exhibits pronounced differentiation, as third- and fourth-tier cities are expected to take longer to rebound compared with key urban centers.
Transaction Volume and Prices Stabilizing
Since the start of the year, the real estate market has followed a “U”-shaped trend. Transaction volumes remained relatively stable in January, continuing the tail-end momentum from last year, but declined in February under the influence of the Spring Festival holiday.
Entering March, supportive policy signals, coupled with the traditional “minor spring” season, prompted a market rebound. According to the China Index Academy, second-hand home transactions in 20 key cities increased for five consecutive weeks following the Spring Festival.
Key cities such as Beijing, Shanghai, and Shenzhen performed particularly well. In Beijing, second-hand home transactions reached 19,886 units in March, the highest monthly level in nearly 15 months, and new home sales totaled 3,670 units, still below the same period last year but more than double the volume recorded in February, according to the data from the Beijing Municipal Commission of Housing and Urban-Rural Development.
Zhao Zhansheng, an analyst at China Index Academy, noted that while Beijing’s new housing market is experiencing a short-term recovery and remains in a bottoming phase, the second-hand market has rebounded quickly, displaying a “minor spring” trend and is expected to sustain a positive trajectory.
The stabilization of transaction volumes has helped support housing prices. Among the 100 cities monitored by China Index Academy, new home prices rose month-on-month in 23 cities in March, while second-hand home prices increased in 7 cities. In Shanghai, second-hand housing prices recorded a month-on-month rise for the first time in 33 months.
Li Yujia, chief researcher at the Guangdong Provincial Housing Policy Research Center, noted that following significant price cuts in the second-hand market, there is now a strong demand for price stabilization, and in recent months, the number of newly listed second-hand homes in hot cities has declined and total listings have peaked, slowing the pace of price declines and contributing to overall price stability.
Regarding new home prices, Li Yujia observed that since the beginning of the year, high-quality projects have sold quickly, while other developments accounted for a smaller share of sales, contributing to upward pressure on new home prices.
Notably, the real estate market in Q1 continues to exhibit differentiation. Analysts highlight a localized recovery, with positive signs in certain key cities, while third- and fourth-tier cities overall remain relatively subdued, and even within major cities, disparities persist between core and non-core areas, as well as between high-quality and standard housing.
“The overall market is still at the bottoming stage,” said China Index Academy.
Expectations Improving
The ongoing policy support is viewed as the primary driver of market stabilization.
According to the China Index Academy, more than 100 provinces, cities, and counties nationwide introduced around 160 policies in Q1 of 2026, focused on boosting demand, reducing inventory, and revitalizing existing stock. The measures included optimizing restrictive regulations, adjusting provident fund loans, providing home purchase subsidies, and enhancing urban renewal–related support policies.
In March, the Government Work Report explicitly emphasized that this year’s priority is “stabilizing the real estate market,” while the 15th Five-Year Plan outline further called for “promoting high-quality development of real estate.”
These measures send a clear positive signal, particularly in shaping market expectations. Zhao Zhansheng noted that although new second-hand housing listings in Beijing rebounded slightly after the Spring Festival, they remain low compared with the same period in recent years, and the decline indicates that sellers’ expectations are gradually stabilizing, fostering more rational market behavior.
An executive from a central state-owned real estate developer noted that, based on the company’s sales feedback from first-tier cities like Beijing and Shanghai, many new buyers were not prompted by eased policy thresholds but were already qualified, which suggests that these buyers are moving past hesitation and accelerating their purchasing decisions.
China Index Academy highlighted that future policies will be more targeted. On the demand side, measures are expected to align with population and birth-related policies, while on the supply side, local strategies will focus on “controlling new supply, reducing inventory, and improving supply quality,” accelerating the development of “good housing” to release improvement-driven demand.
The academy noted that in Q2, the launch of “good housing” projects, combined with the traditional peak season, is expected to support transaction volumes of both new and second-hand housing in core cities. Maintaining the momentum of market recovery in April will be particularly crucial, and sustained activity in these key cities can help bolster market expectations and provide a stronger foundation for stable market performance throughout the year, it said.
However, the academy also cautioned that market differentiation is likely to persist, and achieving a “halt in decline and stabilization” will require simultaneous improvements in both income and housing price expectations.