According to the latest official data, the housing market in China continued to decline in January 2026, with both new and existing home prices seeing widespread declines compared to the same period last year. Sales of the top 100 real estate enterprises dropped by about 19% from the same period last year. Analysts point out that due to multiple structural pressures such as population shrinkage, deteriorating expectations, and unrepaired household balance sheets, the demand for real estate in China will continue to shrink in the long term.
The real estate market in China once accounted for about one-quarter of the total economy, but within just four years, annual sales have halved, and consumer demand for housing has yet to recover.
According to data released by the National Bureau of Statistics of China on February 13, changes in the selling prices of residential properties in 70 large and medium-sized cities were announced for January.
The data shows that the year-on-year price declines for new homes have widened in various cities: new home prices in first-tier cities fell by 2.1% year-on-year, an increase of 0.4 percentage points from the previous month; second-tier and third-tier cities saw year-on-year declines of 2.9% and 3.9% respectively, with declines widening by 0.4 and 0.2 percentage points each.
The year-on-year drop in prices for existing homes is even more significant. Existing home prices in first-tier cities dropped by 7.6% year-on-year, an increase of 0.6 percentage points from the previous month. Among them, Beijing dropped by 8.7%, Guangzhou by 8.3%, Shanghai by 6.8%, and Shenzhen by 6.5%; second-tier and third-tier cities saw year-on-year drops of 6.2% and 6.1% respectively, with slight increases in declines.
It is worth noting that Shanghai recorded a 4.2% year-on-year increase in new home prices, becoming one of the few first-tier cities to maintain positive growth on a year-on-year basis. However, this isolated bright spot cannot overshadow the overall downward trend in the national real estate market.
On a month-on-month basis, official data shows signs of a certain degree of “stabilization after decline.” In January, the month-on-month declines in existing home prices in second-tier and third-tier cities narrowed by 0.2 and 0.1 percentage points, respectively; first-tier city existing home prices dropped by 0.5% month-on-month, a 0.4 percentage point narrowing from the previous month.
However, senior mainland capital expert Xu Zhen holds a cautious attitude towards this. In absolute terms, housing prices in various cities are still in a downward trajectory. The so-called “narrowing” is a marginal improvement on the basis of continued decline, rather than a trend reversal.
According to a recent report released by the China Index Research Institute for January 2026, the sales performance ranking of real estate enterprises in China shows that the top 100 real estate enterprises achieved a total sales volume of 190.52 billion yuan (RMB), a year-on-year decrease of 18.9%.
Specifically, Poly Development, China Overseas Land & Investment, and China Resources Land ranked in the top three, with sales of 15.6 billion yuan, 14.47 billion yuan, and 11.65 billion yuan, respectively. The average sales of the top ten real estate enterprises nationwide in January were 9.33 billion yuan, a year-on-year decrease of 11.6%.
In contrast, the further down the ranking, the greater the decline in sales for real estate enterprises: the average sales of real estate enterprises ranked 51st to 100th decreased by 26.7% year-on-year, indicating an additional pressure on survival for small and medium-sized real estate enterprises.
The land market is also cooling down simultaneously. In January, the total land acquisition amount for the top 100 real estate enterprises was 57.99 billion yuan, a year-on-year decrease, reflecting developers’ continued cautious outlook on the future market.
Global rating agency Standard & Poor’s downgraded its expectations for China’s real estate sales in 2026 on February 8. Standard & Poor’s stated that new home sales in China may decrease by 10% to 14% in 2026, further deteriorating from the previous forecast of a 5% to 8% decline in October 2025.
Senior mainland capital expert Xu Zhen, in an interview with Epoch Times, conducted a systematic analysis of the current real estate market from both the supply and demand sides.
Xu Zhen pointed out that on the demand side, multiple long-term factors are continuously compressing housing demand: declining birth rates and marriage rates are weakening the population base for new housing demand; stagnant growth in household income, unrepaired household asset-liability sheets, which restrict effective purchasing power; housing functionality is shifting from investment attributes to residential attributes, and the demand logic supported by past asset appreciation expectations is becoming unsustainable.
On the supply side, there is a serious oversupply of existing homes and new housing, making it difficult to reverse the situation where supply outweighs demand in the short term. Xu Zhen therefore judges, “The current narrowing of month-on-month declines is just a temporary adjustment within the declining channel, and the trend remains unchanged.” House prices will continue to decline in most cities in line with the macroeconomic trends, with only a few core areas in first-tier cities maintaining relative price resilience due to scarcity.
Analysts at Standard & Poor’s stated in their report, “Oversupply of new homes in China hinders the recovery of the real estate market.” They predict that due to the oversupply leading to a decline in house prices in 2025, there may be a further decrease of 2% to 4% in 2026.
“Declining house prices will weaken the confidence of homebuyers. This is a vicious cycle that is hard to break free from,” the analysts warned.