China’s housing sector displayed a notable shift toward stabilization in February as price drops in 70 major cities began to moderate. According to the latest data released on Monday, the aggressive downward trend observed in previous months is starting to narrow. This development suggests that recent policy interventions may be gaining traction, providing a slight reprieve for the world’s second-largest economy.
In the nation’s most prominent “first-tier” hubs—Beijing, Shanghai, Guangzhou, and Shenzhen—newly built home prices remained steady month-on-month. This flat performance is a significant improvement from the 0.3 percent decline recorded in January. While Shenzhen saw a minor dip, Beijing and Shanghai actually posted modest gains of 0.2 percent, signaling a localized return of buyer confidence in premium markets.
The secondary market, often considered a more accurate reflection of true demand, also saw improvement. Prices for second-hand homes in these top-tier cities fell by only 0.1 percent, a much smaller margin than the 0.5 percent drop seen the month prior. Beijing and Shanghai continued to lead the recovery in this segment, while Guangzhou and Shenzhen faced more persistent downward pressure.
Despite the monthly improvements, the year-on-year data remains a challenge for policymakers. Prices for new homes are still down significantly compared to the same period last year, with third-tier cities seeing the steepest declines at 4 percent. This long-term pressure highlights the scale of the inventory issues that continue to weigh on the broader national economy.
Looking forward, the government has pledged to implement city-specific policies to stabilize the sector throughout 2026. Efforts will focus on reducing existing housing stock and improving the quality of new developments. Additionally, new initiatives aim to provide targeted housing support for young families and first-time parents to stimulate sustainable long-term demand.