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China's resale home prices fell 0.7% in April 2025 compared to the previous month, continuing a downward trend that has been going on all year. This decrease is primarily due to a rise in property listings, particularly in major cities, which followed the relaxation of resale restrictions. The influx of properties intensified competition among sellers, forcing them to lower prices to attract buyers. Year-on-year, resale home prices dropped by 7.2%, while new home prices saw a modest rise of 2.5%. Analysts suggest that home prices have fallen by 20-30% since their peak in August 2021 due to the ongoing crisis in the property sector.
The recent decline in the Chinese real estate market was continued in April 2025, when resale home prices fell by a significant 0.7% from March. According to data from the China Index Academy, this decline is attributed to a surge in the number of available properties, especially in key cities, after the government eased restrictions on property resales. As a result, an oversupply of homes has led to increased competition among sellers, forcing many to reduce their asking prices in order to attract buyers. Advertisement
This shift in the market is part of a broader trend that has been unfolding since earlier this year. After a period of relatively stable prices, the market saw more significant drops in the first quarter of 2025, particularly in the resale sector. On a year-on-year basis, April's resale home prices fell by 7.2%, continuing a pattern of decreases that began earlier in 2025. The monthly drop is a sign of the market's ongoing struggles, with many analysts expressing concerns over the continued softness in the sector.
Meanwhile, new home prices showed a modest 2.5% increase over the same period. This slight rise suggests that demand for newly built properties remains relatively stable, despite the broader challenges facing the housing market. However, the performance of new homes has not been enough to offset the more significant downturn in the resale market.
The situation is further complicated by the fact that a significant portion of household wealth in China-approximately 70%-is tied up in real estate. This high level of exposure means that continued declines in property values could lead to broader economic repercussions, affecting everything from consumer spending to the stability of the financial sector. Analysts have pointed out that the government's efforts to stabilize the property market, including policy measures such as easing restrictions on resale properties, have so far failed to produce a significant recovery.
Since the peak of property values in August 2021, analysts estimate that home prices in China have fallen by anywhere between 20% and 30%. This sharp decline is attributed to a series of factors, including regulatory tightening, the collapse of major real estate developers, and a broader crisis within the property sector. Despite some signs of stabilization in certain segments of the market, the overall outlook for the real estate industry remains uncertain.
The lifting of resale restrictions, intended to increase market liquidity and improve access to housing, has instead led to an oversupply of properties, particularly in large urban centres. With more homes available than there are buyers, sellers are increasingly forced to lower prices in order to stand out in a crowded marketplace. This has made the market more competitive, driving prices down further.
Looking ahead, experts suggest that the road to recovery for China's real estate sector will be a long one. While some expect modest rebounds in certain regions, the overall property market is likely to remain under pressure in the near term. The relaxation of resale restrictions may have added more homes to the market, but it has not been enough to generate the demand needed to drive up prices. For now, it seems the competitive environment will continue to push prices downward, at least in the resale sector.
Despite government efforts to ease restrictions and stimulate the sector, the housing market's recovery seems far from imminent. Experts remain cautious, suggesting that a full market rebound will likely take considerable time and will depend on broader economic conditions and the stability of the property sector.
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