Early momentum in China’s property sector is most apparent in tier-one cities, where optimism is growing. Market experts highlight that the combination of improved buyer sentiment and targeted government policies is stabilising the sector as 2025 approaches. However, the pace of recovery remains uneven across the country1.
Ken Ip, Chairperson of the PropertyGuru Asia Property Awards (Mainland China) Judging Panel, underscores the importance of both sentiment and policy. Measures such as mortgage rate reductions, increased funding, and tailored incentives have restored confidence in top-tier cities, where the rebound is most visible. Shanghai and Beijing, for instance, exhibit robust market activity, largely due to these policy interventions. In contrast, smaller cities continue to see falling prices and excess supply1.
While sentiment is on an upward trend, it has yet to reach all market segments. Affluent buyers are returning, but many still seek clearer signals on price stability and future demand. Sustained recovery will depend on continued policy momentum and consumer confidence, ensuring the rebound extends beyond the core cities1.
Recovery Dynamics
James Woo, Executive Director at Colliers and a Property Guru judge, explains that positive sentiment can drive demand. When buyers feel secure about the market’s direction and see favourable conditions, they are more likely to purchase. Confidence grows with economic stability and easier access to finance. In May 2025, national new home prices rose by 0.30 percent month-on-month. Shanghai saw a 1.47 percent increase, and Guangzhou recorded a 1.25 percent rise. Secondary home transactions in Shanghai climbed 14 percent year-on-year, maintaining an eight-month streak of growth. High-profile projects in Shanghai, such as Runyun Jinmao Mansion, sold out rapidly, with nine developments selling out on launch day. Beijing’s secondary sales, though down 8.3 percent month-on-month, still reached 14,277 units in May.
Policy Measures
A dual approach is shaping the recovery. On the demand side, mortgage rate cuts have brought first-home buyer rates below three percent. Local governments in cities like Guangzhou and Chongqing have launched housing voucher schemes and trade-in programmes to encourage upgrades. On the supply side, over CNY700 billion in special bonds has been allocated for land purchases, with CNY8.54 trillion in financing for “whitelisted” projects. Urban renewal is also underway, with Shanghai and Shenzhen aiming to convert 1 million units in urban villages to improve supply and affordability.
Recognising Progress
The 19th PropertyGuru Asia Property Awards Grand Final 2024 honoured several developers for their leadership and innovation. Zhuhai Huafa Properties Co., Ltd. was recognised as Best Developer (Asia), while PANO HARBOUR and 1 Ki Lung Street received awards for luxury and connectivity-focused developments. These accolades highlight the industry’s shift towards quality, sustainability, and community-building.
Challenges for Broader Recovery
Despite gains in major cities, lower-tier markets continue to face weak demand and oversupply. Home prices in these areas fell 0.11 percent month-on-month in May, with buyers hesitant amid price uncertainty. Woo notes that a broader recovery will require deeper reforms and adoption of international green standards. Stability depends on aligning buyer confidence with effective policies that reduce costs and absorb inventory. Looking ahead, Woo sees debt-for-sustainability swaps and precise land-use reforms as essential for progress. Tier-one cities may consolidate recent gains, but a wider recovery needs long-term commitment.
Shifting Focus Towards Sustainable Development
With the recovery underway in leading cities, attention is turning to sustainable and purposeful development. Woo emphasises that quality housing and consistent policy support are crucial for achieving market stabilisation by late 2025. Developers are now focused on shaping vibrant, resilient communities, moving beyond simply increasing housing supply.
