New home prices in China stabilize in January

According to Reuters’ calculations based on data from the National Bureau of Statistics, home prices remained stable month-on-month, marking the second consecutive month without any increase.

On an annual basis, the prices of new homes dropped by 5.0%, slightly narrowing from the 5.3% decline observed the previous month.

Analysts anticipate that the stabilization of China’s real estate market, which has experienced a significant downturn since 2021, will be a protracted process due to the high inventory of unsold homes, weakening demand, and the long-term decline in population.

“The prolonged decline in prices through 2025 further reinforces our long-term view that the collapse of China’s real estate sector is far from over and that its fiscal system requires significant reform,” stated Nomura in a note.

Official data for January revealed that unsold new homes amounted to 390.88 million square meters in 2024, representing a 16.2% increase from the previous year. Additionally, new construction, measured by floor area, plummeted by 23.0% year-on-year last year.