Home prices started recovery in January

Led by month-on-month growth in first-tier cities, average home prices in the nation’s 70 major cities saw a general recovery in January, and industry experts expect the market’s upward performance will build up confidence among potential homebuyers and lead to further market stabilization in the coming months. In January, 36 of the 70 cities reported month-on-month growth in new home prices, 21 more than a month ago. In terms of year-on-year growth, first-tier cities reported growth against a drop seen in second and third-tier cities, said Sheng Guoqing, Chief Statistician at the National Bureau of Statistics’ Urban Division. The number of cities reporting year-on-year price increases rose to 15, one less compared to the previous month, the National Bureau of Statistics (NBS) said. “This is the first time since September 2021 that the number of cities reporting price increases outnumbered those showing price declines in new home sales, which enhances market estimates for positive growth next month,” said Chen Xiao, Senior Analyst with the Zhuge Real Estate Data Research Center.

Chen said an initial recovery of the property market is likely approaching, first in first-tier and key second-tier cities before spreading to other urban areas as the housing market continues to warm up. The four top-tier cities – Beijing, Shanghai, Shenzhen and Guangzhou – registered a 2.1% annual growth last month in new home prices, and a 0.2% rise from December, according to the NBS. The 31 second-tier cities tracked by NBS reported a growth of 0.1% month-on-month on average in new home prices in January, but a decrease of 1.1% from a year ago. In 35 third-tier cities, January's new home prices slipped 0.1% month-on-month and 3.8% annually. Li Yujia, Chief Researcher at the Guangdong Planning Institute’s Residential Policy Research Center, said market recovery appeared much stronger in cities within the Yangtze River Delta region, contrasting with urban areas in Northeast China and inland regions.

“Cities including Beijing, Shanghai, Hangzhou, Chengdu and Changsha, took the lead in terms of year-on-year new home price growth, and their performance is supported by these cities’ large populations and strong demand fundamentals,” Li said. Yan Yuejin, Director of the Shanghai-based E-house China Research and Development Institution, said the positive home price growth will further extend to more cities in the first half as confidence in stable home prices accumulates.

The pre-owned home market also staged a market rebound as 13 cities witnessed prices rise month-on-month in January, six more than the previous month. And six cities recorded a growth in prices year-on-year, the same as a month earlier. The four first-tier cities reported home prices in the secondary market rose 0.4% from the previous month. Compared to a year ago, these benchmark cities’ pre-owned home prices grew 0.9%, the China Daily reports.