A significant data point in the February housing report is the sudden increase in cities reporting price stability. According to the National Bureau of Statistics, 17 out of 70 surveyed cities reported that new home prices either rose or remained flat. This is a substantial jump from January, when only eight cities could make the same claim, signaling a broadening of the market’s recovery base.
In the four premier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—the average price for new homes did not move between January and February. This “flat” reading is a welcome change for a sector that has been plagued by monthly contractions. It indicates that in the country’s most valuable real estate markets, the sellers’ and buyers’ expectations are finally beginning to align.
Second-tier cities, which include regional industrial hubs, saw an average decline of only 0.2 percent for new homes. Resold homes in these areas fell by 0.4 percent. While still in negative territory, the fact that these declines are narrowing suggests that the peak of the property crisis may be in the rearview mirror. Market sentiment appears to be shifting from fear to a cautious “wait-and-see” approach.
However, the long-term year-on-year metrics serve as a reminder of the market’s recent volatility. New home prices in third-tier cities have dropped 4 percent since February 2025, while second-tier cities have seen a 3.1 percent decline. This suggests that smaller cities are still struggling with the legacy of over-expansion and a smaller pool of qualified buyers compared to the national hubs.
To combat this, the national work report emphasizes “improving supply” and “reducing inventory.” The strategy for 2026 focuses on building higher-quality, “smarter” homes that can attract modern buyers. By providing specific support for newly married couples and families with young children, the government is attempting to anchor the market in the needs of the actual inhabitants rather than investors.