China’s national housing picture remained fragile in January 2026, with the National Bureau of Statistics reporting that prices for new and second‑hand homes across 70 major cities continued to fall year‑on‑year even as month‑on‑month declines softened in several segments. New home prices in the 70‑city sample contracted overall on an annual basis, while the pace of monthly declines narrowed, suggesting some stabilization but not a broad rebound.
The data reveal a stark geographic divergence. Among first‑tier cities, Shanghai stands out: new home prices there were up 4.2% year‑on‑year, even as Beijing, Guangzhou and Shenzhen recorded respective annual drops of 2.4%, 5.3% and 4.9%. Month‑to‑month, new home prices in first‑tier cities fell 0.3%, unchanged from December, with Shanghai roughly flat and the other three falling modestly.
Beyond the big four, second‑ and third‑tier markets fared worse. New home prices in second‑tier cities were down 2.9% year‑on‑year and third‑tier prices down 3.9%, both showing slightly larger declines than the previous month. On a monthly basis, second‑tier new home prices slipped 0.3% (an improvement) while third‑tier new homes fell 0.4%, roughly steady with the prior month.
Second‑hand housing shows even sharper weakness. Month‑on‑month declines eased slightly in first‑tier cities to 0.5%, but year‑on‑year prices for resale homes in first‑tier cities plunged 7.6% overall. Beijing’s resale market fell 8.7% year‑on‑year, Guangzhou 8.3%, Shanghai 6.8% and Shenzhen 6.5%. Resale prices in second‑ and third‑tier cities also worsened, down about 6.2% and 6.1% respectively year‑on‑year.
The split between Shanghai and its peer megacities highlights how localized policy settings and demand drivers are shaping outcomes. Shanghai’s relative outperformance likely reflects a combination of looser local administration of purchase restrictions, targeted incentives, and persistent demand from higher‑income buyers and investors. By contrast, Beijing and the southern tier cities have kept tighter curbs and stricter mortgage disciplines, amplifying downward pressure.
Why this matters is straightforward: China’s property sector remains a critical engine for growth, household wealth and local government finances. Continued year‑on‑year declines — particularly in resale values — depress household balance sheets and curb consumption, while prolonged weakness in lower‑tier markets threatens developers’ cashflows and land‑sale revenues that fund municipal budgets. The January figures point to a market that is stabilizing in parts but still far from a broad recovery.
Markets and policymakers will watch incoming sales, credit flows and local government measures closely. If policymakers opt for deeper, targeted easing in mortgage financing or local fiscal relief, it could shore up demand in troubled markets. Absent such moves, the housing correction could remain protracted and politically sensitive, with implications for banking sector exposures and the wider economy.
Seasonality should be kept in mind: January overlaps the Lunar New Year period when transactions are uneven, so short‑term monthly movements can be noisy. Still, the persistent annual declines, especially in the resale segment, underline structural challenges that simple seasonal adjustments cannot erase.