A survey showed a slight increase in new home prices across 100 Chinese cities in January, alongside a slowdown in price declines in the resale market, following the government’s renewed commitment to support the real estate sector.
According to the China Index Academy, new home prices rose by 0.15% month-on-month, compared with a 0.10% increase in December. Cities such as Chengdu, Shanghai, and Hangzhou saw the launch of high-end projects, which helped push prices higher on both a monthly and annual basis in first- and second-tier cities.
In contrast, third- and fourth-tier cities continued to grapple with excess housing inventory, leading to price declines on both a monthly and yearly basis. In the resale market, prices fell by 0.56% compared with the previous month, down from a 0.70% decline in December.
The real estate sector has been struggling since the 2021 liquidity crisis, triggered by stringent regulatory restrictions that caused developers to default on their debt obligations. Companies are no longer required to disclose monthly data, amid indications that the regulations that fueled the crisis are being eased.
The magazine of the Communist Party of China noted that the sector is undergoing “deep reform,” calling for an acceleration of these adjustments and for stabilizing the market through comprehensive support rather than piecemeal measures.
The academy expects sales to decline in February due to the Spring Festival holiday, with activity rebounding in March, supported by the release of new land plots and increased promotional offers from developers.
