International

China's Home Price Falls Narrow, But Recovery May Be Months Away

  • by- Zaid
  • May 18, 2026
China's new home prices fall at slowest monthly pace in a year, but analysts say property market may take another 1-2 years to bottom out.
China's Home Price Falls Narrow, But Recovery May Be Months Away

May 18: China's new home prices fell 0.1% in April, the slowest monthly decline in a year. However, a broader market recovery remains uneven, with major cities showing firmer prices while smaller ones struggle with oversupply.

Price Movements

New home prices dipped 0.1 per cent in April from the previous month, narrowing from a 0.2 per cent drop in March and marking the slowest decline since April last year. On an annual basis, prices fell 3.5 per cent, compared with a 3.4 per cent decline in March, marking the steepest drop in 11 months. The number of cities reporting monthly price declines fell to 49 from 54 in March.

Analysts' Outlook

"The property market has not yet bottomed out," said Morningstar analyst Jeff Zhang. "Sector indicators are likely to remain weak in the coming months, although sales and prices in higher-tier cities could stabilise." Zhang said oversupply meant the market could take another one to two years to bottom out and show a broader recovery. Lynn Song, chief economist for Greater China at ING, said, "The April data suggest we are closer to a bottom in the property market, though we've had a couple of false bottoms in the past."

Uneven Recovery Across Tiers

New home prices in tier-one cities, including Shenzhen and Shanghai, rose 0.1 per cent month-on-month, while prices in tier-two and tier-three cities fell 0.1 per cent and 0.3 per cent respectively. Property investment fell 13.7 per cent in the first four months compared with the same period last year, steeper than an 11.2 per cent drop in the first quarter. Household loans, including mortgages, contracted by 786.9 billion yuan in April after a 490.9 billion yuan rise in March.

Policy Measures

Following the central government's renewed push for limiting new projects and reducing housing inventory, a number of Chinese cities rolled out incentives such as subsidies for homebuyers. Some cities also stepped up calls for state-backed entities to buy unsold housing units and offer them as affordable housing. In a meeting in late April, China's top leaders vowed to effectively prevent and mitigate risks in key areas and to stabilise the real estate market.