China’s housing market showed fresh signs of stabilisation in February as the National Bureau of Statistics reported narrowing month‑on‑month declines across 70 major and medium‑sized cities, with Beijing standing out as the leader among first‑tier cities. For the first time in months the aggregate indicator for new home prices in first‑tier cities moved from a fall to flat, while Beijing registered a 0.2% month‑on‑month rise in new‑home prices and a 0.3% increase in second‑hand home prices — the largest gains among the country’s top cities.
The February data point to a broader, if uneven, thaw. New‑home prices in first‑tier cities moved from a 0.3% decline the previous month to no change overall in February; second‑ and third‑tier new‑home prices still fell but by smaller margins, down 0.2% and 0.3% respectively. The number of cities recording month‑on‑month increases in new‑home prices rose from five in January to ten in February, with Changchun, Nanjing and Yichang leading the pack at +0.3%.
Underlying the price readings is noticeably higher market activity, especially in Beijing. Local reporting and developer figures show transaction volumes climbing: some new projects achieved by March roughly 80% of the sales originally targeted for March–April, and several high‑end projects recorded double‑digit month‑on‑month increases in visitor inquiries and transactions. Large, improvement‑oriented units have performed particularly well; 144 square metres and above recorded higher price growth than smaller units in both Beijing (+0.5%) and Shanghai (+0.4%).
Three main factors drove the turnaround. First, targeted policy relaxations in major cities — notably in Beijing and Shanghai — have eased buying constraints and revived both rigid (first‑time) and upgrading demand. Second, developers appear to have reduced the scale of post‑year‑end discounting after meeting parts of their annual sales targets, which removed downward pressure on asking prices. Third, seasonal dynamics and a concentrated release of pent‑up interest after the Spring Festival — described in the Chinese press as “reverse New Year” house‑hunting — amplified visits and deals.
Despite the encouraging figures, the improvement is fragile and geographically uneven. The stabilisation is strongest in core cities and in higher‑quality projects that appeal to owner‑occupiers; other cities and price segments continue to see modest declines. The rebound so far leans heavily on policy support and seasonal demand rather than a broad‑based recovery in credit or on a durable upturn in household confidence.
The macro stakes are substantial. Real estate accounts for a large share of China’s investment, household wealth and local government revenues through land sales. A sustained halting of price falls would ease stress on developers, lenders and local budgets and could underpin consumption; conversely, a relapse would revive financial vulnerabilities and political pressure to act. International investors will be watching upcoming data for signs that the tentative inflection becomes self‑sustaining without rekindling speculative excess.
What to watch next: whether March’s transaction strength persists once seasonal effects fade, how banks and policymakers adjust mortgage and credit terms, and whether developers keep discounts pared back or resume aggressive price competition. February’s numbers mark an important inflection point — they suggest stabilisation is possible — but the recovery remains conditional on continued policy support, healthier buyer confidence and tighter financing discipline among developers.