The National Bureau of Statistics of the People’s Republic of China released data on Monday (January 19) on the sales prices of new and existing homes in 70 large and medium-sized cities in December last year. Among them, new home prices saw the largest year-on-year decline in 5 months, while the speed of decline in existing home prices accelerated. Additionally, the sales of new commercial residential properties were halved compared to the peak period, indicating that the Chinese Communist Party’s housing market stabilization policies have had minimal effect.
According to calculations by Reuters based on data from the National Bureau of Statistics of China, the prices of new homes in December decreased by 2.7% year-on-year, marking the largest decline in 5 months, and it accelerated from the 2.4% decline recorded in the previous month. On a month-on-month basis, there was a 0.4% decrease, which was the same as the decline in November.
The data from the National Bureau of Statistics of China shows that in terms of new home sales prices, prices in first-tier cities fell by 1.7% year-on-year, expanding by 0.5 percentage points compared to the previous month; while second and third-tier cities saw declines of 2.5% and 3.7% respectively year-on-year, with declines expanding by 0.3% and 0.2% respectively.
Furthermore, new home prices in first-tier cities decreased by 0.3% month-on-month, and prices in second and third-tier cities both dropped by 0.4% month-on-month.
Regarding existing home sales prices, first, second, and third-tier cities experienced year-on-year declines of 7%, 6%, and 6% respectively, with month-on-month decreases of 0.9%, 0.7%, and 0.7% respectively.
It is noteworthy that in December, the prices of existing homes in all 70 large and medium-sized cities declined. In first-tier cities, Beijing dropped by 8.5%, Shanghai by 6.1%, Guangzhou by 7.8%, and Shenzhen by 5.4%. Compared to new homes, existing home prices more accurately reflect real-time housing demand, highlighting the subdued demand in the Chinese real estate market.
Li Yujia, Chief Researcher at the Housing Policy Research Center of the Guangdong Provincial Urban and Rural Planning Institute, stated that the downward pressure on housing prices remains significant. “At the same time, broader fundamental factors—especially employment and consumption—continue to exert pressure on households’ affordability, willingness, and expectations, becoming key constraints for any rebound.”
Quoting Zhang Jie, a stock analyst at Morningstar, South China Morning Post reported, “The continued weakness in the (Chinese) real estate industry is fundamentally in line with our expectations and may continue to be a major drag on China’s economic growth in the next two to three years.”
In a report released on Monday, Morgan Stanley stated that given Beijing’s relatively passive policy stance, high inventory levels, and persistently weak buyer confidence, the housing sales in China are expected to “continue to face challenges” in 2026.
To stem the decline in housing prices, the Chinese authorities have introduced a series of measures, but they have had minimal impact. In 2025, local governments issued over 500 support policies, and even major cities like Beijing and Shanghai relaxed most of the property purchase restrictions implemented during the real estate boom.
Speaking about the mess in the Chinese real estate industry, Chinese issues expert Wang He told Da Ji Yuan that overall, the trajectory and trends of the vast Chinese economy cannot be reversed. Chinese companies must be prepared for a protracted struggle, with no bright prospects in the medium to short term. The Chinese Communist Party has exhausted all means to rescue the market, but stabilizing the market and preventing further declines is simply unachievable. When the bubble eventually bursts, the consequences will be incredibly dire.
Moreover, in 2025, the Chinese real estate market continued to shrink, with significant declines in development investment, new home sales area, and sales volume.
In 2025, real estate development investment in China amounted to 8.2788 trillion yuan, a decrease of 17.2% compared to the previous year, with residential investment at 6.3514 trillion yuan, down by 16.3%.
In the same year, the sales area of newly built commercial residential properties in China was 881.01 million square meters, marking an 8.7% year-on-year decline, with the residential sales area falling by 9.2%. The sales volume of newly built commercial residential properties was 8.3937 trillion yuan, down by 12.6% year-on-year, with residential sales down by 13.0%.
China’s new home sales volume was 1.82 trillion yuan in 2021, which dropped below 1 trillion in 2024 and further decreased to 0.84 trillion in 2025, slashing nearly half compared to the peak period.