The data indicates that in September, home prices in China’s first-tier cities experienced a wider decline, while prices in second- and third-tier cities saw an accelerated annual decrease. The National Bureau of Statistics released an overview of the real estate market on October 18, revealing that home prices in 70 major cities fell by 5.8% year-on-year in September, a decrease from August’s 5.3% and marking the largest drop since May 2015. Month-on-month, home prices declined by 0.7%, marking the 15th consecutive month of decline.

Specifically, first-tier cities saw home prices decrease by 4.7% year-on-year in September, a widening decline of 0.5 percentage points from the previous month. In cities like Beijing, Guangzhou, and Shenzhen, prices fell by 4.6%, 10.3%, and 8.6%, respectively, while Shanghai saw an increase of 4.9%. In contrast, home prices in second-tier and third-tier cities fell by 5.7% and 6.6% year-on-year, each reflecting an increase of 0.4 percentage points in the rate of decline from the previous month.

On a month-to-month basis, home prices in first-tier cities dropped by 0.5% in September, again showing a wider decline of 0.2 percentage points from the month prior. Notably, prices in Beijing, Guangzhou, and Shenzhen declined by 0.7%, 0.9%, and 1.0%, respectively, while Shanghai experienced a modest increase of 0.6%.

Wang Zhonghua, chief statistician of the National Bureau of Statistics’ urban division, interpreted the data, stating that while the overall decline in sales prices among the 70 major cities is stabilizing month-on-month, the annual decline has deepened compared to the same period last year.

Deputy Director Sheng Laiyun noted that the real estate market has been undergoing continuous adjustments over the past two years. He pointed out that both the central government and local authorities have implemented a series of measures to stabilize the market. He highlighted that, despite a decrease in the amounts invested by developers as well as a drop in construction and sales volumes, the overall rate of decline has lessened.

Additionally, a recent monthly survey conducted by the National Bureau of Statistics among real estate developers and agencies showed that in September, the percentage of new home professionals expressing optimism improved by 10 percentage points compared to the previous month, and second-hand home sales professionals showed an increase of 6.5 percentage points in optimism.

According to reports from the Beijing News, Zhang Dawei, chief analyst at Central Plains Real Estate, emphasized that the market continues to operate at low levels, with significant sales declines among key property enterprises indicating that the market is in a deep adjustment phase. Despite some easing of policies in early September, overall buyer confidence remains insufficient. However, positive trends emerged towards the end of the month as policies were relaxed in Beijing, Shanghai, Shenzhen, and Guangzhou, leading to signs of stabilization in the market.

Li Yujia, chief researcher at the Housing Policy Research Center of Guangdong Academy of Urban and Rural Planning, analyzed the larger decrease in second-hand home prices compared to new homes, attributing it to a lack of improvement in the economic fundamentals and a weakening of societal expectations. This is reflected in the sharp rise in listings for second-hand homes, forcing homeowners to reduce prices to encourage sales, resulting in continuing declines in second-hand home prices that outpace new home prices.