Major cities see improved realty metrics

The property market in China's major cities has improved since the beginning of this year, fueled by stronger policy support and better dynamics on both the supply and demand sides, analysts said.

Data from the China Index Academy's monthly survey of 100 cities showed that the average price of new residential homes reached 17,114 yuan ($2,370) per square meter in January, a slight increase of 0.18 percent from December and up 2.52 percent year-on-year.

The uptick was driven in part by new high-end project launches in major cities like Chengdu in Sichuan province and Hangzhou in Zhejiang province, as well as Shanghai.

Meanwhile, the average price of pre-owned homes stood at 12,905 yuan per square meter, down 0.85 percent month-on-month. However, the rate of decline eased by 0.12 percentage points from the previous month, signaling a tentative stabilization in the secondary market, the academy added.

The number of secondhand homes listed for sale in Beijing has also declined in recent weeks, a shift that analysts say points to improving homeowner confidence and early signs of market stabilization.

Zhang Dawei, chief analyst at Centaline Property Agency, said the capital's residential resale inventory stood at about 140,000 units as of Wednesday, down by more than 6,000 from the 146,000 units recorded in early December.

"The consistent drop in listing volume over recent months signals that homeowner sentiment is turning," Zhang said. "Many sellers are no longer in a rush to offload properties, which often precedes a stabilization in prices and activity."

Analysts said recent extensions and adjustments to key policies have provided sustained momentum.

The individual income tax rebate for home swaps, now extending through the end of 2027, alongside a reduction in the value-added tax on the sale of homes held for less than two years — down from 5 percent to 3 percent — are lowering the cost of transactions.

At the same time, multiple localities have rolled out targeted support for specific groups, including higher housing provident fund loan ceilings for families with multiple children. The housing provident fund is a mandatory savings scheme for employees in urban areas, with contributions made by both employers and employees.

Policymakers are also rolling out parallel measures to address housing inventory. An example gaining traction is the purchase of unsold commercial housing stock by local State-owned enterprises. These apartments are then converted into affordable housing, reducing the glut of vacant homes while expanding the supply of government-supported housing.

"Policy signals are clearly aimed at stabilizing expectations and shortening the market adjustment period," said Liu Shui, director of corporate research at the China Index Academy. "Measures rolled out early this year are designed to boost confidence by supporting both demand and financing."

Liu said that as premium residential sites acquired in 2025 begin to enter the market in major cities, and as some developers ramp up promotional campaigns, demand is likely to gradually pick up by March.

Analysts expect cities such as Beijing, Shanghai, and Shenzhen in Guangdong province to retain room to fine-tune policies — particularly in areas like purchase restrictions and mortgage terms — which could provide a renewed lift to buyer sentiment and transaction activity.

As these leading cities stabilize, improved sentiment will gradually extend to third — and fourth-tier markets, where inventories remain higher and demand recovery has been slower, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.

Moreover, Wang noted that the concept of "quality houses" has moved from policy guideline to market reality, with projects that offer better design, materials and amenities increasingly attracting families looking to upgrade.

At the same time, the expanded use of completed-home sales models and tighter supervision of presale funds are reducing risks for buyers and developers alike, Wang added.

"Quality is now a decisive factor for many buyers, especially those trading up. Developers that deliver on higher standards are gaining a clear edge in a more discerning market."