Chinese First-Tier Cities Lead a Marginal Recovery in Housing Prices

Newly built home prices in Shanghai, Guangzhou, and Shenzhen rose between 0.2 percent and 0.3 percent in March, while Beijing remained flat. Second-hand home prices in first-tier cities rose 0.4 percent month-on-month, reversing a 0.1 percent decline in February. In second-tier cities, new and resold home prices fell 0.2 percent. Prices for new homes in 35 third-tier cities fell 0.3 percent, and resold homes fell 0.4 percent.

This shift follows a local government stimulus package of interest subsidies and adjusted purchase restrictions. In Nanjing, homebuyers who sell their old home to buy a new one receive an interest subsidy of 1 percent of the total loan amount. Shanghai has adjusted housing purchase restrictions and optimized provident fund loan policies.

These measures have increased transaction activity in the property market. New house prices rose in 14 cities in the National Bureau of Statistics survey of 70 major cities, up from 10 in February. Resold home prices rose in 13 cities, up from 10 in February.