February House Prices Rise in More Cities, Market Signals Recovery

Securities Times Reporter Zhang Da

The real estate market is showing signs of recovery. Data released by the National Bureau of Statistics on March 16 indicate that in February, the month-over-month decline in housing prices in 70 large and medium-sized cities continued to narrow. The number of cities with new home prices increasing month-over-month rose by 5 compared to the previous month. In first-tier cities, new home prices remained flat after a 0.3% decrease last month. Industry experts believe that the continued narrowing of month-over-month declines and the first-tier cities’ new home prices stabilizing after a decline are direct signs of market warming. The increase in the number of cities with rising prices further confirms the market’s recovery.

Data shows that in February, new home prices in first-tier cities remained flat after a 0.3% decrease last month. Beijing and Shanghai both rose by 0.2%, Guangzhou remained unchanged, and Shenzhen fell by 0.3%. In second- and third-tier cities, new home prices decreased by 0.2% and 0.3% respectively, with the declines narrowing by 0.1 percentage points.

Regarding second-hand homes, in February, prices in first-tier cities decreased by 0.1% month-over-month, narrowing the decline by 0.4 percentage points from the previous month. Beijing and Shanghai increased by 0.3% and 0.2%, respectively, while Guangzhou and Shenzhen fell by 0.5% and 0.4%. In second- and third-tier cities, second-hand home prices declined by 0.4% and 0.5%, with the declines narrowing by 0.1 percentage points.

Looking at cities with rising home prices, in February, 10 cities saw new home prices increase month-over-month, up by 5 from the previous month. Among them, Changchun, Nanjing, and Yichang each rose by 0.3%, tying for first place; Beijing, Shenyang, Shanghai, and Hangzhou each increased by 0.2%, tying for second; Dalian, Xiamen, and Wuhan each rose by 0.1%, tying for third. For second-hand homes, two cities experienced price increases, unchanged from last month. Beijing led with a 0.3% increase, and Shanghai followed with a 0.2% increase.

Notably, in February, both new and second-hand home prices in Beijing and Shanghai rose, with the highest increases.

Regarding the current market situation, Yan Yuejin, Deputy Director of the Shanghai E-House Research Institute, believes that the data on new home prices show a positive trend: first, the price index decline has narrowed for four consecutive months; second, after nine months of decline, first-tier city prices have stabilized and slightly increased first; third, price indices across all city tiers are improving; and fourth, the number of cities with rising prices has significantly increased. Overall, the signals of price stabilization are strengthening. Coupled with recent positive signs such as increased viewing activity in key cities, this will further promote the formation of a “small spring” market.

Zhang Dawei, Chief Analyst at Centaline Property, also believes that the continued narrowing of the decline in February’s new home prices and the stabilization in first-tier cities are direct signs of market warming. Beijing and Shanghai each rose by 0.2%, playing a core role in stabilizing the market. The increase in the number of cities with rising prices is a positive signal of market recovery.

Regarding the reasons for Beijing’s rising home prices, Gao Yuan, Director of Beijing Lianjia Research Institute, told reporters that from the perspective of first-tier markets, there are three reasons for the increase in new home prices: first, recent market activity has indeed increased; after the Spring Festival, the market entered a peak sales period in March and April, with increased viewing and transaction activity; second, from the supply side, early in the year, the new home market experienced a relative contraction, making supply and demand more skewed toward supply; third, the cancellation of some developers’ discount measures has led to higher actual selling prices. Overall, the current price increase is due to strong market demand, a temporary reduction in supply, and developers’ strategic adjustments.

“Currently, both new and second-hand transactions in Beijing are showing increased volume and slight price rises. This phenomenon aligns with seasonal market characteristics and trends, and is also a result of previous policies and improved customer expectations,” Gao Yuan said.

Looking ahead, Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, believes that March features prominent “small spring” characteristics. On one hand, developers and local governments are pursuing a “good start,” increasing supply of high-cost-performance “good houses,” with strong promotional policies. This not only stimulates demand for home exchanges but also promotes circulation between new and second-hand homes, stabilizing second-hand prices. On the other hand, the increase in high-quality new homes has a positive effect on stabilizing prices. Overall, the short-term trend of stable home prices is quite clear.