New official statistics indicate that China’s residential property market is gradually finding its footing. The month of February saw a contraction in the pace of price declines across 70 medium and large-sized cities. Market analysts are pointing to a rise in the number of cities reporting stable or increasing prices, which grew by nine compared to the start of the year.
The performance of first-tier cities provided the most optimistic data points of the month. Newly constructed home prices in these major metropolitan areas stopped their slide, ending February unchanged from January. Shanghai and Beijing were the standout performers, both recording a 0.2 percent uptick, while Guangzhou held firm and Shenzhen saw a slight 0.3 percent contraction.
Secondary markets in these top-tier cities followed a similar trajectory of improvement. The decline in resold home prices narrowed by 0.4 percentage points compared to January’s figures. Meanwhile, second-tier and third-tier cities also reported a 0.1 percentage-point improvement in their month-on-month trends, suggesting that the “cooling” effect is losing its intensity nationwide.
While the immediate month-on-month outlook is brightening, the annual comparison remains in the red. Year-on-year prices for new homes in second-tier cities dropped 3.1 percent, while third-tier cities fell by 4 percent. These figures indicate that while the market may be bottoming out, a full recovery to previous valuation levels remains a long-term goal.
The administration’s strategy for the remainder of 2026 involves a shift toward “quality over quantity.” According to the most recent government work report, the focus is moving toward eco-friendly, smart, and safe housing. By promoting high-quality property services and supporting growing families, officials hope to transform the real estate sector into a more stable pillar of the “smart economy.”