Data released by the National Bureau of Statistics on September 15 showed that in August, new home prices in first-tier cities edged up 0.1% month-on-month, reversing the flat reading in July, while second and third-tier cities saw declines of 0.1% and 0.2% respectively. Among 70 major cities tracked, 21 recorded month-on-month increases or flat prices for new homes, two fewer than in the previous month.

Notably, Shanghai led all cities with a 3% year-on-year gain and a 0.4% month-on-month rise in new home prices during August. Its second-hand home prices also climbed 0.3% month-on-month, topping the 70-city rankings, while the year-on-year decline of 0.8% was the smallest among all tracked cities.

Fifteen cities saw month-on-month price increases for new homes, with six holding steady.

First-Tier Market Performance

Yang Caifang, a senior statistician at the NBS Urban Statistics Department, explained that among first-tier cities, Shanghai, Guangzhou and Shenzhen posted month-on-month new home price gains of 0.4%, 0.1% and 0.2% respectively, while Beijing recorded a 0.2% decline. On a year-on-year basis, Beijing, Guangzhou and Shenzhen fell 2.3%, 1.9% and 2.3% respectively, but Shanghai rose 3.0%. Price declines in second and third-tier cities continued to narrow, with year-on-year drops of 2.7% and 4.1% respectively, each improving by 0.1 percentage point.

Market Assessment and Analyst Views

Yan Yuejin, deputy director of the Shanghai E-house Real Estate Research Institute, noted in written analysis that the market dynamics are now clear: although prices have fallen modestly, the scope for further declines is narrowing, indicating the property market has largely bottomed out. With supportive factors such as growing buyer confidence, price risks are gradually being cleared.

Looking at first-tier cities this year, the month-on-month new home price index has remained consistently positive, underscoring the demonstration effect these cities have on overall market stabilization. On a year-on-year basis, all tiers of cities have seen narrowing declines, suggesting that while discounts and price concessions still exist, the room for further cuts is shrinking. Notably, early signs from the "Golden September" period show some new home projects in certain cities achieving price increases of 1% to 3%, pointing to improving supply-demand dynamics in the new home market.

Li Yujia, chief researcher at the Guangdong Provincial Urban Planning and Design Institute's Housing Policy Research Center, observed that cities leading in price gains — including Shanghai, Wuxi, Xuzhou, Hangzhou, Shenzhen, Xiamen, Hefei and Guangzhou — are concentrated in the Yangtze River Delta and Pearl River Delta regions. These are either areas with concentrated demand or cities that underwent substantial price corrections earlier, such as Xuzhou and Huizhou.

Shanghai stands out as the only first-tier city with a year-on-year increase in new home prices. Zhang Bo, director of the 58 Anjuke Research Institute, attributes this resilience to supply structure: platform data shows that searches for improved housing (three bedrooms or more) account for over 70% of new home demand in Shanghai, with a clear "positive premium" relationship between new and second-hand homes. It is precisely these quality improvement properties that are underpinning prices.

Second-Hand Homes Continue Upward Trend

In August, second-hand home prices in first-tier cities rose 0.1% month-on-month, marking the sixth consecutive month of increases. Shanghai and Shenzhen gained 0.3% and 0.1% respectively, Guangzhou remained flat, and Beijing declined 0.1%. Year-on-year, first-tier second-hand prices fell 2.7%, with the decline narrowing by 1.0 percentage point from the previous month. Second and third-tier cities each saw month-on-month declines of 0.3% in second-hand prices, with year-on-year drops of 4.9% and 5.6% respectively.

Yan Yuejin observed that quality second-hand listings in first-tier cities are now being snapped up quickly, driven by prime locations and superior property conditions. The overall market shows an "80/20" pattern, where only about 20% of second-hand properties sell briskly while the remainder still involves price negotiation. He emphasized that year-on-year declines are narrowing across all city tiers, and since prices have undergone deep corrections, the issue of inflated valuations has largely been resolved. Further downside appears limited, and the market is entering a sustained stabilization phase.

However, listing data indicates ongoing caution. Zhang Bo pointed out that the strategy of exchanging price cuts for volume continues. Based on 58 Anjuke's August monitoring of 100 cities, second-hand listings totaled 2.5107 million units, ending three consecutive months of increases with marginal supply-side improvement. Yet new listings rose 8.3% year-on-year, indicating selling pressure has not fully cleared. The average listing duration in 100 cities reached 94.1 days, with the year-on-year figure turning positive to negative at -1.9%, suggesting improved inventory turnover efficiency but still cautious buyer decision-making.

National Investment and Sales Data

From January to August, national real estate development investment totaled 4.7979 trillion yuan, down 19.9% year-on-year (on a comparable basis), with residential investment at 3.7017 trillion yuan, down 19.7%. Construction area under development reached 5.6077 billion square meters, down 12.8%; new construction starts fell 24.8% to 298.94 million square meters; and completed floor area dropped 23.7% to 210.97 million square meters.

New home sales by floor area reached 498.8 million square meters from January to August, down 12.1% year-on-year, while sales value totaled 4.747 trillion yuan, a 13.0% decline with the contraction continuing to narrow. Meanwhile, according to Ministry of Housing and Urban-Rural Development data, second-hand home transaction area reached 549.23 million square meters in the first eight months, up 10.6% year-on-year.

Li Yujia emphasized that rising second-hand transactions alongside falling new home sales reflect structural shifts in demand rather than weakness in the new home market. As housing returns to its residential function and becomes a major consumer good, demand in hot cities is dominated by first-time and first-time upgrade buyers who prioritize location flexibility, lower total prices and unit prices, immediate occupancy, convenient amenities, and better commuting access — making second-hand homes the preferred choice in an era of stock housing. The new home market is increasingly oriented toward improvement demand, particularly pure upgrade buyers seeking larger floor areas and higher price points. This segment is relatively small and niche in nature, making year-on-year declines in transactions somewhat inevitable.

Outlook for the "Golden September and Silver October"

Li Yujia expressed optimism about the upcoming "Golden September and Silver October" season. Developers, having previously contracted supply, are expected to accelerate launches of cost-effective products. Demand accumulated during the slower July-August period is also likely to be released. The new policy on presale homes is expected to reduce ineffective supply and shorten the land supply-to-sale cycle on the supply side, improving supply-demand balance and creating room for inventory destocking. On the demand side, it will drive supply-side reforms and stimulate new demand. Additionally, developers may offer promotional deals on older inventory, further boosting demand. By year-end, the new home market is expected to achieve healthier and more stable supply-demand dynamics.