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Zhu Wenqian

New home prices in China’s first-tier cities rose 0.2 per cent in May, extending a three-month rebound after nine months of losses and a flat February, pointing to a gradual recovery in confidence as stabilisation measures take hold, analysts have said.
Compared with the previous month, May home prices edged up 0.2 per cent in Shanghai and Guangzhou, gained 0.4 per cent in Shenzhen, and slipped 0.2 per cent in Beijing, according to data from the National Bureau of Statistics (NBS) released on Tuesday.
Across 70 large and medium-sized cities tracked nationwide, 16 recorded month-on-month increases, up from 14 in April, the NBS said.
“More than one-fifth of the 70 cities posted home price gains, marking a positive indicator,” said Yan Yuejin, vice-president of Shanghai-based property consultancy E-house China Research and Development Institute. “These cities generally enjoy sound population and economic fundamentals, robust industrial growth, and strong housing demand from young people and home upgraders.”
Sales of new commercial buildings reached 2.94 trillion yuan (US$435 billion) in the first five months, down 13.5 per cent year on year. Residential property sales alone fell 14.1 per cent year on year, the NBS said.
Prices in the four first-tier cities fell 1.7 per cent on average in May from a year earlier, narrowing the decline by 0.4 percentage points from April. Shanghai rose 3.2 per cent, while Beijing, Guangzhou and Shenzhen declined 2.1 per cent, 3.3 per cent and 4.5 per cent, respectively.

“This reinforces our view that tier-one cities have stronger demand-supply dynamics,” said Edward Chan, a Greater China property analyst at S&P Global Ratings. “In 2026, year-on-year changes in primary home prices remain in line with our estimates.”
Chan said while home prices in tier-one cities were likely to stabilise first, lower-tier markets were “expected to face ongoing challenges due to weaker demand”.
The recent policy easing remained limited to local measures and was focused on expanding the use of housing provident funds, Goldman Sachs said in a report on Tuesday.
It added that Shenzhen posted the strongest month-on-month gain among tier-one cities, and that the pace of decline in home prices in tier-two and tier-three cities narrowed.
Citi said in a report on Tuesday that the latest round of local easing came amid a market recovery, reinforcing the upturn and household expectations.
Griffin Chan, an analyst at Citi Research, added that with a high base in the first half of 2025 and a lower base in the second half of last year, the sales recovery momentum could continue into the second half of 2026, measured year on year.
China’s property sector, once accounting for about a quarter of the economy, has been in a prolonged downturn since late 2020, with falling home prices weighing on household wealth.
Existing home prices in the four tier-one cities edged up 0.4 per cent in May month on month, unchanged from April. Beijing and Guangzhou rose 0.1 per cent, while Shanghai and Shenzhen increased 0.6 per cent, NBS data showed.
Shanghai’s pre-owned housing market saw strong sales in spring, with May transactions exceeding 28,000 units, the highest same-period tally since 2021, according to the Shanghai Real Estate Trading Centre, a government-affiliated agency responsible for managing the city’s property market.
“With sufficient price adjustments and greater consensus between buyers and sellers, the turning point for second-hand home prices is expected to be confirmed in the next few months,” said Yan of E-house China Research.
“First-tier cities are foreseen to lead price increases, and their stabilising trend will gradually extend to more core second- and third-tier cities, further boosting market confidence.”
The government work report released during the “two sessions” in March called for continued policy support to stabilise the property market. Official publication Qiushi had repeatedly urged stronger, targeted measures to stabilise market expectations this year, stressing that real estate remained a key pillar of the economy.


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Price gains in tier-one cities in May suggest confidence returning as policy support steadies sentiment


Price gains in tier-one cities in May suggest confidence returning as policy support steadies sentiment.


China’s first-tier new home prices rise for third month as stabilising steps gain traction

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Price gains in tier-one cities in May suggest confidence returning as policy support steadies sentiment

Price gains in tier-one cities in May suggest confidence returning as policy support steadies sentiment