On February 19th, the National Bureau of Statistics released the January housing price index for 70 cities. A review of the data reveals that the national housing price index continued the trend of stabilizing after a decline in the fourth quarter of last year, with more pronounced characteristics of stabilization.

Zhang Bo, Dean of the 58 Anjuke Research Institute, stated that according to the January data released by the National Bureau of Statistics, the policy’s supportive effects are gradually emerging, and the market’s trend of “stabilizing after a decline” is continuously strengthening. However, market confidence is in the stage of steady recovery. Amidst the differentiated landscape, the resilience of prime locations in core cities will become the main support for the market in 2025.

New home prices in second-tier cities start to rise, with stronger momentum for improvement-oriented new homes
In January, the sales prices of new residential buildings in first-tier cities increased by 0.1% month-on-month, with the growth rate decreasing by 0.1 percentage points from the previous month. Among them, Beijing saw a decline of 0.4%, Guangzhou remained unchanged, while Shanghai and Shenzhen increased by 0.6% and 0.2%, respectively. The sales prices of new residential buildings in second-tier cities shifted from unchanged in the previous month to an increase of 0.1%, marking the first rise since June 2023. The sales prices of new residential buildings in third-tier cities declined by 0.2% month-on-month, with the same rate of decline as the previous month.

Yan Yujin, Deputy Director of the Shanghai E-House Real Estate Research Institute, said in an interview, “The most notable feature of the data is that after the rise in housing prices in first-tier cities, prices in second-tier cities are also starting to increase.”

According to Zhang Bo, first- and second-tier hotspot cities are steadily entering a phase of “stabilizing after a decline”. The prices of both new and existing homes in first-tier cities continue to rise month-on-month. The month-on-month price of new homes in second-tier cities shifted from unchanged to an increase of 0.1%, marking the first positive turn since June 2023. This change is noteworthy, especially with stronger recovery momentum in Nanjing, Hangzhou, Chengdu, and Wuhan, which are also the leading cities in this round of recovery.

Yan Yujin told reporters that currently, there are 24 cities with positive month-on-month growth in the housing price index. The top five cities with the highest price increases are Nanjing, Chengdu, Shanghai, Ningbo, and Wuhan. The most noteworthy city is Nanjing, as it is a typical city that has undergone profound market adjustments. In both December of last year and January of this year, Nanjing was the city with the fastest-rising housing prices. Therefore, the example of Nanjing indicates that this year, we should focus on second-tier cities that have undergone profound adjustments, as these cities have strong fundamentals for recovery and will become the forerunners in the new round of housing price increases.

Furthermore, improvement-oriented new homes have stronger momentum for price increases. Several cities, including Shanghai, Tianjin, Nanjing, and Hangzhou, have seen more significant price increases for new homes larger than 144 square meters. According to key monitoring by Anjuke of 66 major cities nationwide, the popularity of 120-150 square meter, 150-200 square meter, and over 200 square meter homes with four or more bedrooms continues to trend upward. The demand for improvement-oriented homes maintains an upward trend, demonstrating good resilience, and is expected to continue this year.