China’s Property Market Shows Signs of Stabilization Amid Ongoing Challenges

In February 2026, China's home prices exhibited a moderation in decline, suggesting a potential bottoming out of the ongoing property downturn. According to data from the National Bureau of Statistics, new-home prices in 70 cities fell by 0.28% from January, a slight improvement from the previous month's 0.37% drop. Resale home values decreased by 0.43%, marking the smallest decline in ten months. Analysts from Citigroup Inc. anticipate that supportive policy measures will lead to a rebound in home sales as the busy season approaches.

BloombergChina’s new home prices extend drop in February as recovery remains elusive By Reuters

Local governments have implemented various measures to stabilize the real estate sector. For instance, Shanghai eased homebuying regulations in February, allowing more non-residents to purchase homes, while Beijing relaxed rules for non-resident buyers in December. Additionally, the central government has reduced the value-added tax on residential properties sold within two years of purchase. These interventions aim to control new supply and reduce inventory, as emphasized during a recent political meeting.

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Despite signs of improvement in major cities, the recovery remains uneven. While top-tier cities like Beijing and Shanghai reported slight price increases of 0.2% in February, lower-tier cities continue to face challenges with weak demand and high inventory levels. Zhang Dawei, an analyst at Centaline Property, noted that the market is still in an adjustment phase, with prime projects showing resilience compared to struggling lower-tier markets.

China’s new home prices extend drop in February as recovery remains elusive By Reuters

The ongoing property slump has significant implications for China's economy, as declining home prices discourage household spending and dampen consumer confidence. The downturn complicates efforts by policymakers to rebalance the economy amid external pressures, including protectionist measures from trading partners and geopolitical tensions. The real estate sector, which has been under strain since government measures to limit borrowing in 2020, continues to hinder economic growth.

China’s new home prices extend drop in February as recovery remains elusive By Reuters

Looking ahead, analysts predict that home prices may continue to decline before stabilizing in 2027. A recent Reuters poll indicated expectations of a 10.3% drop in property investment and a 6.5% decrease in sales this year. Huang Yu from the China Index Academy emphasized that a sustained recovery will depend on firmer secondary-home prices in core cities and improvements in employment and income expectations.

China’s new home prices extend drop in February as recovery remains elusive By Reuters

Despite the government's commitment to stabilize the property market, skepticism remains. John Lam, head of China property research at UBS Group AG, expressed concerns that home prices may continue to fall for at least two more years, attributing this to the persistent decline in used home values.

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• “The slower monthly decline is a positive sign, but the market is still in an adjustment phase,” — Zhang Dawei, Analyst, Centaline Property

China’s new home prices extend drop in February as recovery remains elusive By Reuters

• “The market is still in a destocking phase,” — Huang Yu, Analyst, China Index Academy

China’s new home prices extend drop in February as recovery remains elusive By Reuters