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In November, the prices of second-hand homes decreased across China’s 100 largest cities from first to fourth tiers, mainly due to an oversupply and subdued market expectations. Conversely, prices for new constructions saw an increase, driven by the launch of new high-end projects.
The average price per square meter for pre-owned homes in these top cities stood at approximately CNY13,143 (around USD1,858), representing a nearly 8% annual decline and a 0.9% drop from October, according to a recent report based on the China Residential House Price Index (HPI-100).
In first-tier cities, existing home prices fell the most last month, dropping by 1.2% compared to October and by 5.6% year-over-year. Second-tier cities experienced a 1% decrease month-over-month and an 8.2% reduction annually. Third- and fourth-tier cities saw slightly smaller declines, with prices decreasing by 0.8% and 7.5% respectively.
Despite the price drops, the volume of second-hand property transactions increased, reaching 17.04 million square meters in the top 30 Chinese cities, a 14% increase from October. Transaction volumes in both first- and second-tier cities surged by 10% and 13% month-over-month in November.
The average cost per square meter for newly constructed homes in these cities was CNY17,036 (around USD2,410), reflecting a 0.4% increase from October and a 2.7% rise year-over-year. The expansion of high-end housing projects in cities like Shanghai, Chengdu, Hangzhou, and Ningbo contributed to the rise in new home prices in these urban centers.
In November, prices for new homes in first-tier cities increased by 0.8% from the previous month and by 6.7% year-over-year. Prices in second-tier cities grew by 0.4% monthly and 1.9% annually, while third- and fourth-tier cities saw declines of 0.2% and 1.6%, respectively.
The recent release of the guiding principles for the 15th Five-Year Plan emphasizes urban renewal projects as the new key driver for the real estate sector, according to industry forecasts. Local governments in Chongqing, Hubei, and other regions have issued nearly CNY35 billion (USD5 billion) in special bonds aimed at revitalizing and acquiring idle land, alongside supportive financial and tax policies.
Industry analysts anticipate a sales push from developers this month, with a focus on increasing high-quality new property offerings in core cities. This expected increase in supply could positively affect the upcoming transaction volumes.
Though the second-hand housing market is currently experiencing price volatility due to abundant listings, transaction volume is projected to remain stable by year-end supported by ongoing policy measures.
The China Residential House Price Index (HPI-100) has been tracking home prices in the country’s top 100 cities since 2010, providing crucial insights into market trends.
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