Prices Rise for Second Month
China’s new home prices rose for the second straight month in May 2025. A private survey released on June 1 showed the market gaining modest ground, thanks to fresh policy support.
The China Index Academy (CIA) reported that average new home prices in 100 cities increased by 0.25% from April. This follows a 0.27% gain the month before. The back-to-back growth suggests early signs of a potential turnaround after months of decline.
Policy Measures Lift Sentiment
This modest rebound coincides with a series of supportive measures. Notably, the People’s Bank of China introduced a RMB 300 billion ($41.5 billion) relending facility. This funding helps state-owned enterprises buy up unsold housing stock.
In addition, local governments have eased restrictions on home purchases. Many cities also reduced down payment requirements. These steps aim to revive housing demand and restore buyer confidence.
Consequently, the CIA noted a slight increase in both sales volume and market activity. This was especially visible in tier-one and tier-two cities.
Challenges Still Loom
Despite the positive momentum, analysts remain cautious. The price increase is still modest, and deeper challenges remain—especially in smaller cities. These areas continue to struggle with excess housing inventory.
“While these early signs are encouraging, a full recovery needs more,” said a property analyst based in Shanghai. “Economic stability, job growth, and structural reforms will be key to sustaining the rebound.”
Regional Impact and Outlook
China’s real estate sector plays a crucial role in driving Asia’s economy. Stabilization in this sector could have ripple effects. It may benefit everything from raw material suppliers to global investors watching China’s bond markets.
For regional developers and investors, the policy shift offers a potential window of opportunity. However, risks persist if the rebound loses momentum.
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