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Cao Li

Home prices in mainland China continued to decline at a rapid pace in December, posing challenges for an economy that is struggling to find new growth drivers.
New home prices fell 0.4 per cent month on month on average across 70 cities, according to data from the National Bureau of Statistics (NBS) on Monday. The fall matched November’s drop and was among the steepest in more than a year.
Prices slipped 3 per cent year on year in December, accelerating from a 2.8 per cent drop in November. Only six out of the 70 cities registered month-on-month gains, compared with eight in November.
Downward pressure on prices remained considerable, said Li Yujia, chief researcher at the Guangdong Housing Policy Research Institute, a government-linked think tank. “Meanwhile, the broader fundamentals – especially employment and consumption – continue to weigh on households’ ability and willingness to pay, as well as expectations, making them a key constraint on any rebound.”
Authorities have rolled out a series of measures to stem the fall, but with little effect. Local governments introduced more than 500 supportive measures last year, with top cities like Beijing and Shanghai easing most buying restrictions introduced during the boom years. Early this month, Chinese media reported that authorities in Tianjin told developers to rein in deep price cuts to curb falling housing prices.
At the annual central economic work conference last month, policymakers pledged to stabilise the housing sector, but stopped short of issuing measures many see as crucial for its recovery.
Morgan Stanley said in a report on Monday that it expected China’s home sales to “remain challenging in 2026 given the reactive policy stance, high inventory and continued weakening buyer sentiment”.

Primary home prices in the four tier-one cities – which are more economically developed and typically have higher housing demand – fell 0.3 per cent last month, narrowing from a 0.5 per cent decline in November. Shanghai was the only city among the four to post a monthly gain, with prices rising 0.2 per cent from November. Prices in Beijing, Guangzhou and Shenzhen fell 0.4 per cent, 0.6 per cent and 0.5 per cent respectively.
New home prices in tier-two and tier-three cities both fell 0.4 per cent, compared with 0.3 per cent and 0.4 per cent, respectively, in November.
Second-hand home prices, which are more in line with real-time housing demand, dropped 0.7 per cent in December from November, and 6.1 per cent year on year.
China’s real estate sector, which at its peak accounted for about a quarter of the country’s gross domestic product, has been in a prolonged downturn since late 2020, when Beijing introduced the “three red lines” policy to tighten developers’ financing and cool an overheated market.
As developers came under liquidity strain, many struggled to complete pre-sold homes and service their debts. Homebuyer confidence then weakened and sales fell, intensifying pressure on the sector. China sold new homes worth 7.3 trillion yuan (US$1 trillion) in 2025, down 55 per cent from 16.3 trillion yuan in 2021.
The housing crisis has dragged down many privately owned developers, from China Evergrande to Country Garden, once leading real estate firms in the country.
In the latest development involving China Vanke, which is struggling to pay off its mounting debts, the state-backed firm is negotiating with creditors to extend its onshore and offshore bonds. The firm has nearly US$50 billion in interest-bearing liabilities.
Barclays said in a recent report that offshore bondholders of China Vanke might recover just 10.1 per cent of what they were owed in a base-case scenario and only 0.9 per cent in a worst-case scenario.


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New home prices fall again in December, with declines across most cities, as second-hand values plunge year on year


New home prices fall again in December, with declines across most cities, as second-hand values plunge year on year.


Mainland China’s home prices extend slide, adding strain to struggling property sector

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}New home prices fall again in December, with declines across most cities, as second-hand values plunge year on year

New home prices fall again in December, with declines across most cities, as second-hand values plunge year on year