China’s housing market is undergoing a sustained period of weakness, with home prices declining in the majority of its major cities. According to World Bank data covering 70 major urban centers, the share of cities experiencing month-to-month price decreases has surged since late 2023, reflecting a broad-based slowdown across the sector.
The downturn is also illustrated in China’s national residential home price index, which has declined more than 14% since August 2021. This long-term trend, visualized in the chart below, indicates not only cyclical fluctuations but also deeper structural challenges facing the sector.
From June 2018 to April 2025, the data tracks the dual trajectory of:
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the residential home price index, and
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the percentage of cities with month-on-month declining prices.
While prior to 2021 fewer than 30% of cities reported price drops in any given month, that share has increased sharply in recent years. Notably, in December 2023, May 2024, and September 2024, all 70 cities included in the dataset recorded declining home prices.
Contributing Factors
The persistent weakness in China’s housing market has been driven by several key factors:
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Low buyer confidence, especially following developer defaults and project delays;
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Excess housing supply, particularly in lower-tier cities;
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High debt levels among property developers;
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And regulatory tightening, including restrictions on speculative purchases and access to credit.
These factors have combined to significantly slow new investment and erode price stability. For a sector that once accounted for nearly 30% of China’s GDP (including construction and related industries), this downturn represents a notable shift in the country’s economic model.
Resilience in Top-Tier Cities
Despite the broader trend, some resilience remains in China’s top-tier cities. For instance, in Shanghai, $1 million now buys just 44 square meters of prime residential space—approximately 474 square feet. This reflects a 47% drop in purchasing power over the past decade, underscoring continued demand at the high end of the market, even as broader market indicators decline.
Outlook
Looking ahead, analysts suggest the market may remain under pressure without significant policy intervention. Although targeted measures to support homebuyers and developers have been introduced, their impact has so far been limited. The government faces the challenge of balancing market stabilization with efforts to reduce financial risk and discourage speculative activity.
As the data shows, China’s real estate sector is in a phase of adjustment—shifting away from decades of rapid expansion toward a more uncertain and fragmented future.
