House Prices in China Have Started to Decline: Reasons and Effects

China's Housing Market Price Decline Continues

According to the data from the National Bureau of Statistics of China, in November 2023, new and second-hand housing prices in major and medium-sized cities across the country continued to decline. This situation underscores the condition of the housing sector.

Annual Price Changes

New housing prices fell 1.2% year-on-year in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, while in second-tier cities, prices decreased by 2.2% in 31 cities, and in third-tier medium-sized cities, there was a 3.5% drop in 35 cities.

Moreover, in the largest urban areas like Shanghai, new housing prices increased by 5.1% year-on-year, making it an exception in this regard.

Second-Hand Housing Price Decline

Second-hand housing prices declined by 5.8% in first-tier cities, 5.6% in second-tier cities, and 5.8% in third-tier cities.

Ongoing Decline Since April 2022

New housing prices in China have shown a downward trend since April 2022. The economic contraction following COVID-19 and the debt crises in the real estate sector continue to put pressure on prices.

Real Estate Investments in 2023

Real estate investments in 2023 showed a decrease of 9.6%, and are projected to decline by 10.6% in 2024. In the first 11 months of 2025, real estate investments fell by 15.9% compared to the same period last year. New housing sales have also dropped by 7.8% on a square meter basis.

Government Measures and Their Results

In recent months, the central government has lowered credit interest rates and minimum down payment requirements to stimulate the housing market. Local governments have implemented various policies, such as tax reductions and relaxation of regulations, to encourage housing sales. However, it is observed that these steps have not changed the overall trends.