China’s New Home Prices Rise in May Amid Policy Support

New home prices in China rose by 0.30% in May across 100 cities, nearly double April’s 0.14% increase, according to data from China Index Academy. The gain suggests recent government measures, including lower lending rates and broader macroeconomic support, may be helping stabilize the property market.

Despite prolonged pressure on real estate prices, particularly since 2023, this uptick indicates a possible turning point for the sector. The research institute noted that macro-level policy support has been intensifying, aiming to reinvigorate demand and bolster market confidence.

First- and second-tier cities led the price growth, with Shanghai recording the highest monthly increase among the 100 cities surveyed. On a year-over-year basis, average new home prices rose 2.56% in May, slightly higher than April’s 2.50% increase.

However, the second-hand housing market remains sluggish. Prices for pre-owned homes fell 0.71% month-over-month and 7.24% year-over-year, extending declines of 0.69% and 7.23% in April. The persistent oversupply of second-hand listings continues to suppress resale values.

Real estate has historically been a key driver of China’s economy, once contributing around 25% to GDP and comprising approximately 70% of household wealth. Any sustained improvement in the housing market could help offset broader economic challenges, including ongoing trade tensions with the U.S.

Official housing price figures from China’s National Bureau of Statistics are set to be released on June 16. Investors and analysts are watching closely for further signs of stabilization as policymakers double down on efforts to revive one of the country’s most critical economic pillars.