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Zhu Wenqian

Local government support has lifted sentiment in China’s struggling property sector ahead of the spring sales season, but analysts remain divided on the outlook as structural pressures persist.
New and existing home prices across 70 major mainland cities fell at a slower pace month on month in January, while annual declines widened, according to data released by the National Bureau of Statistics (NBS) on Friday.
New home prices in the four tier-one cities dropped 2.1 per cent year on year, 0.4 percentage points steeper than the previous month, the NBS said.
“The number of cities that experienced sequentially higher property prices continued to fall in primary markets in January,” said Chelsea Song, an analyst covering China’s economy at Goldman Sachs in Hong Kong.
“Despite recent targeted city-level housing easing measures, we believe the property markets in lower-tier cities still face strong headwinds from weaker growth fundamentals than top-tier cities, including more severe oversupply problems,” Song said.
Goldman Sachs said recent moves by cities, including Shanghai, to buy existing homes for public rental housing highlight efforts to support the property market.
S&P Global Ratings said without major nationwide policies to tackle oversupply, primary home sales would likely keep falling this year, and it would be difficult for China’s property market to achieve a sustainable stabilisation.
“We believe piecemeal measures by local governments to purchase excess inventory may not be enough to revive the market,” said Edward Chan, director of S&P Global Ratings.
“In our view, China’s vastly oversupplied primary housing market is pushing down home prices. Only the government could address oversupply in the property sector, given the scale of this problem. We have yet to see signs that it is keen to intervene,” Chan said.
S&P expected nationwide primary property sales to drop 10 to 14 per cent to between 7.2 trillion yuan (US$1.04 trillion) and 7.6 trillion yuan in 2026, a deeper decline than its previous forecast of 5 to 8 per cent.
Despite lingering uncertainties, mainland property stocks – long out of favour in Hong Kong’s market – have rebounded recently, outperforming the broader market since the start of the year.

Liquidity across both housing transactions and capital markets was a key driver of the rally, supported by progress in clearing inventory, renewed access to equity financing and continued southbound buying of leading developers, HSBC said.
The bank added that policy momentum was picking up, as Shanghai commenced acquiring secondary homes and Fujian province rolled out a comprehensive policy package.
“Optimism on market recovery is growing, and an increasing number of investors are considering a market inflection this year,” said Michelle Kwok, head of Asia real estate and Hong Kong equity research at HSBC.
The China mainland properties index, which tracks mainland developers eligible for Stock Connect trading, has risen 11.3 per cent so far this year, outpacing the Hang Seng Index’s 3.7 per cent gain over the same period.
Shanghai unveiled a plan on February 2 to purchase existing homes and convert them into public rental housing for young people, with a pilot launching in downtown Pudong, Jing'an and Xuhui districts.
In early February, Fujian encouraged local governments to buy existing commercial housing to cut inventory, roll out housing subsidies, provide support for multi-child families and offer targeted relief for commercial properties.
Early signs of stabilisation were also emerging in Shanghai’s secondary market. January transactions exceeded 22,000 units, up 25 per cent from a year earlier, according to Shanghai Lianjia Research Institute.
It marked the third straight month that pre-owned home sales topped 22,000 units, even without fresh stimulus.
“Declining secondary listings and robust sales volumes indicate gradual demand recovery as prices become more attractive, with secondary-market prices in tier-one cities stabilising,” Kwok said.


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Business

Property

Home-price declines eased in January and policy support is building, but analysts warn oversupply continues to cloud the outlook


Home-price declines eased in January and policy support is building, but analysts warn oversupply continues to cloud the outlook.


Policy backing steadies China property outlook, but full rebound still elusive

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Home-price declines eased in January and policy support is building, but analysts warn oversupply continues to cloud the outlook

Home-price declines eased in January and policy support is building, but analysts warn oversupply continues to cloud the outlook