Policies deliver uptick in property sales, prices

The traditional spring home-buying season, which typically peaks in March and April, stretched into May this year as policy support and targeted demand in first-tier cities drove a notable pickup in sales, helping to restore market expectations, experts said.

Data from the China Index Academy show that total new home sales of the country's top 100 real estate firms reached 1.23 trillion yuan ($181.89 billion) in the first five months, with the year-on-year decline narrowing for the third consecutive month.

In May alone, sales by those developers stood at 328.78 billion yuan, up 17.6 percent from April, according to the academy.

China's new home sales steadied in May, driven by a pickup in larger cities, even as the national market remained largely flat, market watchers said.

The 50 major cities tracked by real estate information provider CRIC recorded 13.62 million square meters of new home transactions in May, up 2 percent from April and just 2 percent lower than a year earlier.

The resilience came largely from larger cities. Combined transactions in Beijing and Shanghai, as well as Guangzhou and Shenzhen in Guangdong province, totaled 2.15 million square meters in May, an 11 percent month-on-month increase and a 6 percent year-on-year gain, according to CRIC.

The cumulative January-May sales in these four top cities fell 12 percent from a year earlier, but marked an improvement from an 18 percent decline in the January-April period.

Historically, housing sales taper off in May after the March and April rush. "The typical post-peak cool-down didn't happen this year," said Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute.

"Policy support, combined with the release of pent-up demand in core cities, provided a floor for the market in May," Yan added.

From January to May, provincial and city governments across China rolled out more than 430 property-related policies, according to the China Index Academy. The measures included easing purchase restrictions, adjusting provident fund rules, offering direct purchase subsidies and improving urban renewal guidelines.

A key part of the policy toolkit has been the expansion of trade-in programs, in which local governments or developers purchase old homes to help owners upgrade to new properties. By the end of May, more than 40 such programs had been launched nationwide.

Shanghai piloted a trade-in program in several districts in February and later expanded it to all of the city's central urban areas. Guangzhou also rolled out a similar initiative.

"These programs are effective in breaking the logjam," said Li Yujia, a researcher on residential property policy in Guangdong. "They provide liquidity to owners of old homes and create a more fluid market for new properties."

While new home sales in major Chinese cities showed unusual resilience in May, the secondary market also held steady, with transaction volumes in 20 key cities rising nearly 20 percent from a year earlier, according to data from the China Index Academy.

Beijing recorded about 16,000 second-hand home transactions in May, the highest for the month since 2021 and the third consecutive month above the 15,000-unit threshold that industry watchers consider the line between a sluggish and a stable market.

Shanghai, the country's largest second-home market by transaction volume, recorded 28,000 units in May — also a five-year high for the month. The city saw three separate days in May with more than 1,500 online contract signings, a pace that exceeded the daily average for most of the past year.

Price data in May add to a growing body of evidence that the prolonged property downturn may be showing signs of bottoming out in major cities.

The average price of new homes in 100 major cities rose 0.16 percent month-on-month to 17,156 yuan per square meter, and was up 2.03 percent from a year earlier. The monthly gain was driven largely by first-tier cities, where the launch of premium projects in prime locations pushed up the average, according to the China Index Academy.

In the secondary market, the average price of existing homes stood at 12,692 yuan per square meter, down 0.32 percent from April — the smallest month-on-month decline since mid-2024. The narrower drop suggests that seller sentiment and buyer demand are gradually finding a balance after more than two years of falling prices, the academy said.

"The improvement in price signals, especially the moderation in secondary market declines, indicates that market expectations are slowly improving," said Chen Wenjing, director of policy research at the academy.

However, the recovery remains uneven. While first-tier cities saw new home prices rise, many smaller cities still face downward pressure, Chen said, adding that the national secondary market as a whole remains in negative territory, even though the rate of decline has eased.

With mid-year financial reporting approaching, developers are expected to step up marketing, and the launch of new quality projects in core cities could support sustained improvement — at least in key urban hubs, Chen said.