Resale home prices in 100 Chinese cities fell by 0.7% month-on-month in April, according to data released Thursday by the China Index Academy, signaling persistent weakness in the country’s property market as more homes flood the market amid easing policy restrictions.
The decline, which follows a steeper slide that began in February, comes as local governments have lifted resale restrictions in several major cities to stimulate transaction volumes. However, the effect has been a surge in listings, intensifying competition among sellers and placing downward pressure on prices.
“Price cuts to drive sales remained the market norm,” the China Index Academy noted in its WeChat report, highlighting the continued soft sentiment among homeowners and investors.
Real Estate and the Chinese Economy
China’s real estate sector remains a key pillar of household wealth, with approximately 70% of household assets tied to property. Though the sector once accounted for as much as 25% of GDP, its influence has waned amid a multi-year property correction that some analysts estimate has wiped 20% to 30% off average home prices since their August 2021 peak.
As Beijing braces for the macroeconomic fallout from renewed U.S.-China trade tensions, signs of stabilization in housing prices would provide a much-needed buffer to economic activity. However, April’s data suggest that a broad recovery remains elusive.
Diverging Trends: Resale vs. New Builds
While the resale market remains under pressure, the new-build segment showed modest gains, with average prices for newly constructed homes rising 2.5% year-on-year in April, the report found.
The year-on-year price decline for resale homes stood at 7.2%, underscoring the growing valuation gap between new and existing housing stock — a phenomenon driven by developer incentives, buyer preferences, and government subsidies for new builds.
Policy and Market Outlook
Policymakers have adopted a gradual approach to supporting the housing sector, relying on selective easing measures rather than broad stimulus. In recent months, local governments in cities such as Shanghai, Guangzhou, and Chengduhave eased restrictions on home resales and mortgage rates in an attempt to liquify stagnant housing inventory.
Still, consumer confidence remains fragile, and housing demand continues to be undermined by slower income growth, demographic shifts, and tightened credit conditions.
Further data in the coming weeks, particularly on mortgage uptake and housing starts, will offer deeper insight into whether the market’s soft landing remains achievable — or whether additional policy support will be necessary.
