BEIJING: China‘s new home prices extended their decline in December, official data showed on Monday, underscoring persistent strains in the property sector despite repeated government pledges to stabilise it.
Prices fell 0.4% month-on-month, the same pace of decline as in November, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
On an annual basis, prices dropped 2.7% in December, quickening from a 2.4% fall in the previous month and marking the fastest decline in five months.
“The continued weakness in the property sector is broadly in line with our expectations and is likely to remain a major drag on China‘s growth over the next two to three years,” said Jeff Zhang, an equity analyst at Morningstar.
The continued weakness in new home prices suggests the property downturn could persist into this year unless policymakers roll out more forceful measures to support the sector.
Of the 70 cities surveyed by the NBS, six posted price gains in December, while 58 recorded declines.
NBS data also showed the secondary market remained soft, with existing home prices in tier-one, tier-two and tier-three cities falling faster from a year earlier.
A real estate recovery would help lift household consumption by bolstering perceived wealth and confidence and could also ease broader imbalances between supply and demand in the economy.
“Looking ahead to 2026, the divergent trend in China’s property market will continue to deepen,” said Zhang Dawei, an analyst at Centaline Property.
Home prices in major cities are expected to gradually stabilise, Zhang added, while smaller cities that lack industrial support and are experiencing population outflows will face a prolonged inventory reduction process.
Property investment in China dropped 17.2% while home sales by floor area decreased 8.7% in 2025, according to separate official data.
Transforming the property sector
An article published on January 1 in Qiushi, the Communist Party’s official journal, said China’s property sector, which impacts dozens of different industries, remained a pillar of the economy and had significant room for transformation.
The sector was “undergoing a profound adjustment,” the article said, and it called for “strong policy actions” to stabilise expectations.
The property crisis, which began to unfold in mid-2021 after the launch of a government campaign to curb excessive borrowing, has pushed once high-flying developers like Country Garden and Evergrande into financial distress as they are saddled with heavy debt burdens and a backlog of unfinished projects. China’s financial regulator said last week it would promote the “normal operation” of a government programme aimed at accelerating financing support for eligible residential projects that have been stalled.
