The Chinese housing market appears to be entering a phase of “higher-quality stabilization” as of February 2026. Official data reveals that the month-on-month decline for new homes across 31 second-tier cities was just 0.2 percent. In smaller, third-tier cities, the decline was 0.3 percent. Both metrics represent a consistent improvement from the previous month’s performance.
This cooling of the price decline is particularly evident in the resold home sector. Second-tier cities saw the pace of price drops slow to 0.4 percent, a 0.1 percentage-point improvement. Third-tier cities followed suit with a 0.5 percent decline. These marginal gains are being interpreted by industry experts as a sign that the market is finally digesting the excess inventory that has hampered growth for years.
The stabilizing trend is most pronounced in the “Big Four” cities. For the first time in several months, the average price for new homes in these areas remained flat. This was bolstered by growth in the northern and eastern regions, which offset continued weakness in the southern manufacturing hubs. The increase in the number of cities reporting price stability—now totaling 17—points to a broadening base for potential recovery.
Despite these positive monthly signals, the year-on-year data reflects the deep structural shift occurring in the industry. For second-hand homes, prices have dropped by over 6 percent annually across all city tiers. This suggests that while the “crash” may have been averted, the era of rapid price appreciation is likely over, replaced by a focus on utility and living standards.
The 2026 government work report outlines a clear path for the sector’s future. The state plans to promote “quality homes” that prioritize comfort and environmental sustainability. By aligning the real estate market with “green technologies” and “smart economy” goals, the objective is to create a more resilient housing model that avoids the boom-and-bust cycles of the past.