The improvement was narrow rather than broad-based. In its official interpretation of the February figures, the National Bureau of Statistics said first-tier new-home prices were flat after a 0.3% fall in January, with Beijing and Shanghai each rising 0.2%. But second- and third-tier cities still posted monthly declines, and resale prices kept falling across all three city tiers, underscoring how much of the pressure remains outside the strongest urban markets.
China home prices still lack a durable floor
The broader property backdrop was still weakening. In detailed January-February real estate market data, the NBS said development investment fell 11.1% year over year, floor-area sales dropped 13.5%, sales value fell 20.2% and funds raised by developers declined 16.5%. That matters because it suggests the slower monthly price decline is happening alongside weak sales and tighter cash flow, not during a convincing demand-led recovery.
The near-term outlook also remains bleak. A Reuters poll of analysts last week projected that China’s home prices will fall 4% in 2026 before stabilizing in 2027. That forecast fits a market still burdened by unsold inventory, softer income expectations, affordability strains and a persistent lack of confidence in lower-tier cities.
Why this latest setback feels familiar
The current setback also fits a pattern of false starts. In April 2024, a private survey showed the fastest monthly rise in new-home prices in more than two and a half years, raising hopes that local easing measures were starting to work. A few weeks later, Beijing escalated support, with a major rescue package built around lower mortgage rates and local-government purchases of some unsold homes.
Those hopes faded quickly. By June 2024, official prices were falling at the fastest clip in nearly a decade, and even when March 2025 prices later flattened after a February dip, the pause still failed to turn into a lasting recovery. February’s data looks less like a break from that cycle than the latest reminder that brief improvements in top-tier cities have not yet repaired the national market.
For now, the clearest message is that China’s property slump may be easing in speed without ending in substance. Until resale prices stabilize more broadly and excess supply thins meaningfully beyond the top tier, a durable turn in China home prices still looks distant.
