Beijing, February 1, 2026 — In a positive turn for China's beleaguered property market, the average prices for new homes across 100 cities increased by 0.18% in January 2026, according to a recent survey by the China Index Academy, a leading property research firm. This growth follows a 0.28% gain in December, signaling a gradual recovery amidst government pledges to stabilize the sector.
Key Insights from the Survey
The survey indicates that cities, including Chengdu, Shanghai, and Hangzhou, experienced the launch of high-end housing projects, contributing to both month-on-month and year-on-year price increases in first- and second-tier cities. In contrast, third- and fourth-tier cities continue to face challenges with diminishing inventory, which has resulted in a decline in property prices on both a monthly and annual basis.
In the secondary market, resale prices fell by 0.85% from the previous month, which represents a narrowing of the decline from 0.97% seen in December. This slight moderation in the overall downturn suggests that the worst effects of the recent market contraction may be receding.
Government Measures and Policy Changes
China's property sector has been under significant strain since 2021, when regulatory crackdowns led to a liquidity crunch among real estate developers. Many firms defaulted on debts, exacerbating the crisis. However, recent reports suggest that the government is easing some restrictions, citing that developers are no longer required to report monthly data under the "three red lines" policy, which marked a pivotal shift in oversight.
On January 1, an article in Qiushi, the official journal of the Communist Party, emphasized the need for a "profound adjustment" in the property sector. The article called for policymakers to streamline the adjustment process, reduce market volatility, and provide comprehensive support rather than piecemeal responses.
Outlook for the Months Ahead
As China approaches the Spring Festival holiday, sales activity is expected to slow down in February. However, analysts predict that demand will rebound in March, particularly as high-quality land becomes available in key urban areas and developers ramp up promotional efforts before the holiday.
This optimism about a potential recovery is based on historical trends where property sales tend to surge post-holiday, aided by renewed consumer confidence and governmental support aimed at stabilizing the market.
Conclusion
The recent upturn in new home prices and the narrowing declines in the resale market reflect a possible turning point for China's property sector. Supported by government interventions focused on easing the burdens of developers and stimulating demand, the real estate market may be beginning to navigate toward a more stable future. While challenges remain, particularly for lower-tier cities, the gradual improvements suggest a cautious yet positive outlook for homeowners and investors alike.
For continuous updates on the evolving situation in China’s property market, stay tuned for our forthcoming reports and analyses.
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