China's housing market shows signs of recovery as property prices in some megacities begin to stabilize

China's National Bureau of Statistics (NBS) released new data on Monday indicating a narrowing decline in residential property prices across 70 major cities, with pre-owned secondary homes in Beijing and Shanghai recording price increases for the first time this year.

Experts noted that the latest data indicates a stabilizing trend in Chinese property market, potentially signaling a shift to the beginning of housing market recovery.

In a detailed report, the NBS noted that the contraction in prices for new residential buildings in the first-tier cities slowed, with a 0.2 percentage point decrease to 0.5 percent. Similarly, second-tier cities maintained a consistent drop of 0.7 percent, while third-tier cities saw a 0.2 percentage point reduction in the rate of price declines from the previous month’s 0.8 percent price drop.

The resurgence was more pronounced in the pre-owned secondary property market. In top-tier cities, the drop in resale home prices eased significantly, shrinking 0.8 percentage points to a 0.4 percent decline, with Beijing and Shanghai experiencing price gains for the first time in 2024. 

Smaller cities delivered mixed results, in the second-tier cities, overall pre-owned housing prices recorded a 0.9 percent decline, a slight improvement of 0.1 percentage points from last month. Third-tier cities have matched the previous month's decrease of 0.9 percent.

The NBS’s latest release are being viewed as a very positive indication for the market, the decreased rate of decline in both new and pre-owned properties sends a strong signal, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Monday.

“After a sweeping price drop in June, we are seeing stabilizing indicators which could enhance market confidence in pre-owned properties. The narrowing month-on-month declines in housing prices point to a potential turnaround in the coming months,” Yan said.

In June, among the 70 surveyed cities, 64 cities saw price declines in new residential properties and price decline of pre-owned properties in 66 cities. Notably, mega-cities like Shanghai, Hangzhou, Beijing, and Nanjing have begun showing a rising trend in selling prices, suggesting that largest cities are leading the market recovery.

This upturn in prices follows a series of real estate stimulus policies. On June 26, Beijing announced new round of policy adjustments, including a significant reduction in minimum down payment required for home purchases. The move positioned Beijing among major Chinese cities to relax buying restrictions, with expectations of boosting China's property market soon.