Home prices in China's four first-tier cities continued to climb in June, extending a four-month recovery streak, according to data from the National Bureau of Statistics released on July 15. New home prices in these cities rose 0.1% month-on-month, while existing home prices increased 0.3%, though both gains moderated from May.
First-tier cities lead the recovery
In June, new home prices in first-tier cities edged up 0.1% from May, slowing from the previous month's 0.2% rise. Beijing was the only city among the four to record a decline, with prices falling 0.3%. Shanghai, Guangzhou and Shenzhen posted gains of 0.3%, 0.2% and 0.3%, respectively. The trend was similar for existing homes, which rose 0.3% month-on-month, also a deceleration of 0.1 percentage point. Beijing's existing home prices increased 0.1%, while Shanghai, Guangzhou and Shenzhen rose 0.4%, 0.4% and 0.3%.
Broader market shows signs of stabilization
Across 70 major cities, the housing market is showing clear signs of bottoming out. In June, 20 cities reported month-on-month increases in new home prices, up from 16 in May and the highest count since May 2025. Second-tier cities saw their new home prices stabilize, with the month-on-month change turning flat from a 0.1% decline in May. Cities like Hangzhou, Xuzhou and Shenyang led the gains. Inventory pressure is also easing: unsold commercial housing floor space fell 0.9% year-on-year to 763.15 million square meters at end-June, with three-year-old or newer inventory dropping 3.5%.
Demand shift and expert outlook
Zhang Bo, president of the 58 Anjuke Research Institute, noted that improvement-driven demand in first-tier cities is steadily being released, while second-tier cities are showing tiered stabilization. Regional hubs like Wuxi and Xuzhou in third-tier cities are already seeing a recovery. Anjuke's online data shows that in Shanghai, user inquiries and lead generation rose strongly in late June, supporting price resilience. Guangzhou also displayed bottoming characteristics, with VR viewings and appointment bookings growing significantly. However, Beijing and Shenzhen saw a slowdown in online engagement and conversion to physical viewings. Overall, the sustained month-on-month price gains in first-tier cities are underpinned by ongoing replacement demand from upgraders.
Supply contraction and long-term view
New home sales in the first half of 2026 fell 11.6% in area and 13.6% in value year-on-year, while new construction starts dropped 24.1%. This supply contraction, combined with declining inventory, suggests further price support, especially in fast-clearing markets like first-tier and strong second-tier cities. At a July forum, Morgan Stanley China chief economist Robin Xing argued that China's housing correction is nearing its end, citing historical patterns. He noted that real home prices typically take about six years from peak to trough, and China's adjustment has already matched that duration. With property investment now below 6% of GDP, he expects the market to fully stabilize by the second half of 2027.