The latest housing data from China reveals a market caught between two trends: improving monthly momentum and persistent annual pressure. In February, the month-on-month decline for new home prices in 70 cities showed a clear narrowing. This trend was most obvious in first-tier cities, where new home prices reached a flat 0.0 percent, stopping a multi-month slide.
Beijing and Shanghai were the primary drivers of this monthly momentum, each posting a 0.2 percent gain in new home prices. The resold market in these cities also performed well, with Beijing up 0.3 percent. These localized successes helped pull the national average up, even as smaller third-tier cities continued to see modest monthly declines of 0.3 to 0.5 percent.
However, the year-on-year perspective tells a different story. New home prices in third-tier cities are down 4 percent compared to February 2025. In the second-hand market, first-tier cities have seen a massive 7.6 percent decline over the last twelve months. These figures represent the long-term “price correction” that is still working its way through the national economy.
The government’s strategy for the rest of the year is to “stabilize” this environment. According to the 2026 work report, this will be achieved through “well-ordered steps” to promote quality homes. The plan includes a focus on “smart” features and “eco-friendly” designs, aiming to make new properties more attractive to a tech-savvy and environmentally conscious younger generation.
Ultimately, the goal is to bridge the gap between current valuations and long-term stability. By providing targeted support for families with children and first-time buyers, the government is looking to build a new floor for the market. The February data suggests that while the year-on-year pressure is still heavy, the month-on-month stabilization is a critical first step toward a healthier property sector.