China's new home prices declined again in September 2026, highlighting the continued weakness in the country's property market despite government efforts to revive housing demand and stabilize the struggling real estate sector.
According to Reuters calculations based on data from China's National Bureau of Statistics, new home prices fell 0.1% month on month in September, matching August's decline. On a year-on-year basis, prices dropped 2.8%, improving slightly from the 3.0% decrease recorded in August.
The latest figures extend a prolonged housing downturn, with annual home prices declining continuously since June 2023. The persistent weakness underscores the challenges facing China's real estate market, which remains a significant obstacle to economic growth and consumer confidence.
Housing conditions varied across Chinese cities. Major metropolitan areas showed early signs of stabilization in both new and existing home prices, supported by government incentives and relaxed property purchasing restrictions.
Shanghai, one of China's largest property markets, introduced additional measures in August to encourage home purchases, including easing buying restrictions and offering subsidies. These initiatives appear to have provided some support to housing demand in major cities.
However, smaller Chinese cities continued to experience falling new and resale home prices on both monthly and annual bases, suggesting that the property market recovery remains uneven.
To address declining housing demand outside major metropolitan areas, China's central bank and financial regulator introduced mortgage interest subsidies in late September for eligible homebuyers.
The program applies to properties priced at no more than 1.5 million yuan ($224,417), primarily targeting buyers in smaller cities where housing costs are considerably lower than in major urban centers.
Despite these policy measures, China's property crisis continues to weigh on household spending. Declining property values have encouraged many homeowners to increase savings rather than consumption, weakening domestic demand and complicating broader economic recovery efforts.
The prolonged downturn has also reduced revenue for local governments, which depend heavily on property-related activities and land sales.
Separate official figures showed that property investment and home sales contracted at a faster pace during the first nine months of 2026, reinforcing concerns about the sector's outlook.
With housing demand remaining fragile, China's property market faces continued pressure as policymakers seek to restore buyer confidence and prevent further declines in real estate activity.
