China’s new home prices held steady in March, halting a slight decline from February, according to data from the National Bureau of Statistics (NBS). This stabilization comes as government support measures aimed at rejuvenating the debt-ridden property sector struggle to address persistently weak demand. While prices improved slightly from a 0.1% drop in February, year-on-year, home prices fell 4.5%, showing a marginal improvement over February’s 4.8% decline.
The Chinese government has repeatedly pledged to stabilize property prices, as the housing market has become a significant economic concern. The sector, which once accounted for about a quarter of the nation’s GDP at its peak in 2021, continues to face pressures from both domestic financial struggles and escalating trade tensions with the U.S. In particular, mounting tariffs have added strain to an already fragile economic environment.
“Looking ahead, exports are up against mounting U.S. tariffs. Trade tensions between China and the U.S. escalated significantly in April,” said Sarah Tan, an economist at Moody’s Analytics. To mitigate the negative effects of these external pressures, Chinese policymakers have increasingly focused on fostering domestic growth, with the real estate sector remaining a top priority.
While prices remained flat in March, resale home prices saw a slight increase in China’s Tier 1 cities compared to February, suggesting a potential stabilization in the most sought-after urban areas. However, overall property sales by floor area dropped by 3.0% in the first quarter, although the pace of decline eased compared to earlier months.
Looking to the future, analysts expect property sales to hit a bottom by the end of the year, with a gradual recovery potentially starting in late 2026 or early 2027. GDDCE Research’s Ma Hong forecasts a 50-basis-point cut to the five-year loan prime rate (LPR) by mid-year to ease financing costs.
Despite recent policy adjustments, including mortgage rate cuts and more relaxed rules for homebuyers, the recovery in the property market is expected to be slow and uneven. China’s prospects for 2025 remain muted, with ongoing external challenges and a fragile domestic economy continuing to weigh on consumer and investor confidence.
Prime Minister Li Qiang expressed that the real estate market still has significant potential for development and that further policy efforts would be needed to stabilize the sector and drive economic growth. The focus on purchasing unsold homes for affordable housing remains a critical strategy in efforts to stabilize the housing market.
