China’s housing market slipped further in October, with new home prices recording their sharpest monthly fall in a year. The latest data from the National Bureau of Statistics shows prices dropped 0.5 percent from September, a decline steeper than the previous month’s 0.4 percent fall. On a yearly basis, prices were down 2.2 percent, matching September’s slide and signalling that the market remains firmly under pressure.
These back-to-back monthly drops come at an especially sensitive time. September and October are usually a strong sales period for Chinese developers, often described as a “golden season” for homebuying. The fact that prices continued to fall during what should have been a busy time shows just how deep the challenges run. Demand remains weak, sales continue to drag, and confidence is struggling to return in a sector that has been trying to stabilise since the turbulence of 2021.
Part of the problem is structural. The market has been hampered by sluggish sales and liquidity issues for years, and the slowdown in the broader economy hasn’t helped. Beijing has been reluctant to announce sweeping new stimulus this year, even though it introduced several supportive measures in the second half of 2024. Most of the government’s recent steps have focused on reaffirming earlier commitments rather than rolling out fresh interventions.
Analysts say the issues are now multi-layered. Zhang Dawei of Centaline points to factors like population decline in smaller third-tier cities, a growing number of resale listings, and low buyer confidence. These pressures, he says, make it harder for any recovery to take hold. He believes further relaxation of mortgage rules could help steady sentiment, especially for first-time buyers and families looking to upgrade their homes.
Some easing has already been attempted. During the first half of 2025, mortgage costs were lowered for certain buyer segments. But momentum faded in recent months as policymakers prioritised caution. With confidence sinking again—particularly outside the major metros—many experts argue that more targeted support may be needed.
A survey by the China Index Academy shows how sharply sentiment has dipped. Across more than 260 cities, home-purchasing confidence in smaller cities fell by nearly 3 percentage points from the previous month. For many households, uncertainty about prices, job stability, and long-term value is outweighing incentives to buy.
The resale market is under even greater stress. Official data shows that both monthly and yearly resale prices fell in all 70 cities surveyed. This broad-based decline suggests owners are struggling to find buyers even at reduced prices. Xu Tianchen of the Economist Intelligence Unit warns that the pace of decline in second-hand homes is approaching a dangerous point. If the slide continues, he says, it could prompt the kind of swift intervention seen in 2024, when authorities stepped in to prevent deeper market fallout.
Other indicators also paint a subdued picture. Property investment has continued to fall, and home sales by floor area dropped again in the first ten months of this year. Developers remain cautious, with many focusing on finishing existing projects rather than launching new ones.
Looking ahead, the government’s priorities are becoming clearer. Policy recommendations for China’s 2026–2030 development plan emphasise “high-quality” growth in the property sector. This includes improving the mix of housing supply to address different needs, streamlining systems for development and financing, and resolving the risks that continue to weigh on the sector.
These long-term plans hint at a shift away from the old model of rapid construction and easy credit. But for now, the market is still searching for stability. With prices falling and confidence fading, the pressure is building on authorities to decide whether the current policy stance is enough—or if stronger action is needed to put the sector back on firmer ground.
