China’s New Home Prices Stabilize in March 2025

credits to: realty.economictimes.indiatimes.com

China’s New Home Prices Stabilize in March 2025

China’s property market may be showing the first signs of stabilizing after years of turbulence. According to the National Bureau of Statistics (NBS), new home prices across 70 major cities remained unchanged in March 2025 on a month-on-month basis. This follows a 0.1% dip in February and offers a glimmer of hope that the sector may be bottoming out after years of decline.


Year-on-Year Figures Still in the Red

Despite the flat monthly figures, new home prices are still down 4.5% compared to March 2024. This is a slight improvement from the 4.8% year-on-year drop recorded in February 2025. The deceleration in price declines could suggest that the market is starting to find a floor, though experts caution that any recovery will likely be slow and uneven.


Policy Support Amid Economic Headwinds

The Chinese government has introduced a series of measures to support the struggling real estate sector. These include loosening mortgage restrictions, reducing down payments, and improving financing options for developers. However, the broader economic context complicates recovery efforts.

Trade tensions between China and the U.S. have resurfaced, with the U.S. recently imposing new tariffs on Chinese goods. China responded with retaliatory measures, escalating uncertainty and putting further pressure on economic growth.


Property Sales and Investment Still Declining

While the stabilization in home prices is a welcome sign, other key indicators remain concerning. Property sales by floor area declined by 3.0% in the first quarter of 2025, and real estate investment dropped 9.9% compared to the same period last year.

These figures indicate that developers remain cautious, and consumer sentiment is still weak despite supportive policy measures.


Analysts Predict More Easing Ahead

Economists believe that additional stimulus may be on the horizon. Some predict that the People’s Bank of China could cut the five-year loan prime rate by as much as 50 basis points by mid-2025 to further reduce borrowing costs.

“We’re seeing signs of policy intent, but the pace of recovery will be contingent on a broader economic rebound and consumer confidence,” said a senior analyst at a Beijing-based financial firm.


Road to Recovery: Gradual and Uneven

While the March data provides a potential turning point, experts agree that a full recovery in China’s property market will take time. Many developers are still grappling with liquidity challenges, and urban migration patterns are shifting due to remote work and changing demographics.

Some analysts forecast that real estate investment may stabilize by late 2026 or early 2027, but only if current policy support continues and macroeconomic conditions improve.


Final Thoughts

China’s housing market remains a bellwether for the broader economy, and March’s data brings a measure of cautious optimism. As policymakers continue to balance support for developers with broader economic reforms, the coming months will be critical in determining whether the sector can sustain this early momentum.

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