The month-on-month decline in second-hand home prices continues to narrow, and the housing market is expected to usher in a "small spring"

In February, the overall real estate market trend stabilized, with signs of marginal improvement gradually emerging.

According to data from the China Index Academy, the average price of newly built residential properties in 100 cities nationwide was 17,107 yuan per square meter, a slight decrease of 0.04% month-on-month but an increase of 2.37% year-on-year. The average price of second-hand residential properties in these cities was 12,835 yuan per square meter, down 0.54% month-on-month, with the decline narrowing by 0.31 percentage points compared to the previous month.

Cao Jingjing, General Manager of the Index Research Department at China Index Academy, analyzed that due to the Spring Festival holiday, the real estate market entered a low season in February. Local governments and developers generally launched activities such as housing purchase festivals and price reductions, but the number of new projects was relatively small, mainly focusing on clearing existing inventory. As a result, the new home prices in 100 cities saw a slight month-on-month decline. Regarding second-hand homes, the month-on-month decline in second-hand residential prices in these cities continued to narrow for the second consecutive month.

Yan Yuejin, Deputy Director of the E-House Research Institute in Shanghai, told Securities Daily that the overall real estate market remained optimistic in February. Especially after price adjustments, the cost-effectiveness of purchasing homes continued to increase, improving residents’ willingness to buy. The growing attractiveness of purchase cost-effectiveness is a current market feature, and the further narrowing of price declines is also related to active transaction volumes.

In terms of transaction volume, data from the China Index Academy shows that in February, the nationwide second-hand housing transaction area was 73.685 million square meters, a year-on-year increase of 3%.

Policy support continued to bolster the real estate market in February. Local governments focused on stabilizing the market by implementing city-specific measures to control new supply, reduce inventory, and optimize supply. For example, at the end of February, Shanghai adjusted its real estate policies, further easing housing purchase restrictions, optimizing housing provident fund loan policies, expanding support for multi-child families, and releasing demand from various groups. Meanwhile, cities like Chongqing, Ningbo, and Jinan also issued housing purchase subsidies to stimulate demand.

Regarding the future performance of the real estate market, Yan Yuejin believes that market optimism is increasing. Additionally, the positive macroeconomic outlook, improvements in urban quality, and policy support for replacement demand will all contribute to the “small spring” and the subsequent upward trend of the real estate market.

“Looking ahead, as holiday effects gradually fade, pent-up demand is expected to be released step by step. With increased quality supply in key cities, a gentle recovery of the ‘small spring’ market is likely,” said Cao Jingjing. She also noted that 2026 will be a crucial year for stabilizing the real estate market, and the initial performance will serve as a weather vane for the year’s overall trend. The role of real estate in supporting economic growth remains important, and short-term policies are expected to continue focusing on controlling new supply, reducing inventory, and optimizing supply through relevant measures.