China's New Home Prices See Sharpest Decline in 11 Months, Affecting 63 Major Cities

November 2025 Sees Sharpest Home Price Decline in China

In November 2025, China experienced the most significant drop in new home prices in almost a year, impacting 63 out of 70 major cities. According to AA News, the relentless decline highlights pressing issues of oversupply and diminishing consumer confidence. Year-on-year declines were reported in 61 cities, emphasizing that attempts to stabilize or revive the market have yet to take effect. The situation has raised alarms about potential broader economic consequences if the trend continues unaddressed. The ongoing slump is particularly pronounced in tier-two and tier-three cities, where the market struggles with reduced demand and excessive stock.

China's Real Estate Struggles Despite Policy Interventions

Efforts by the Chinese government to bolster the real estate market have included lowering credit interest rates and reducing minimum down payments. Despite these measures, the anticipated positive impact has not materialized. Data from Menafn.com indicates that initiatives aimed at reviving demand through easier credit access have fallen flat, with prices continuing to decline across major markets. First-tier cities recorded a modest 0.8% average drop, while second-tier cities saw prices fall by 2%, and third-tier markets suffered a 3.4% reduction. The government's inability to reverse the downward trajectory has fueled skepticism about the effectiveness of current economic policies.

Shanghai Emerges as an Outlier Amidst Nationwide Declines

While most of China grapples with falling home prices, Shanghai stands out with a remarkable 5.7% annual increase in new-home prices. This anomaly, reported by Trading Economics, suggests a localized demand fueled by unique economic factors or investor behavior distinct from other major cities. Nonetheless, this uptick in Shanghai is an exception rather than the rule, with previously owned homes across first-tier cities dropping by 4.4% year-on-year. This mixed performance within the sector highlights the complexity of China's real estate landscape, where localized factors can significantly influence market trends.

Shanghai stands out with a remarkable 5.7% annual increase in new-home prices.

Impact of Real Estate Slump on Related Industries

The downturn in the real estate market extends its influence to other critical industries, such as cement and steel, which are feeling the ripple effects of decreased construction activities. As noted in AA News, the real estate sector, including its indirect contributions, accounted for nearly 30% of China's GDP in 2015. The current slowdown threatens these industries, which are vital to China's broader economic ecosystem. This interconnectedness underscores the importance of stabilizing property markets to support not only direct real estate activities but also the broader economic framework.

Market Insights and Expert Forecasts

According to Trading Economics, the year-over-year change for new home prices was -2.2% in October 2025, marking the 28th consecutive month of decline. Experts at RealEstateAbroad.com, including Senior Analyst Maya Tarek, predict that the long-term projection for Chinese new home prices will see a gradual recovery, with forecasts of -0.30% in 2026 and an optimistic 0.30% growth by 2027. These insights suggest a cautious yet hopeful outlook for investors, emphasizing the need for strategic positioning and risk assessment in the current climate.

Future Implications for Global Real Estate Investors

The sustained decline in China's property prices presents both challenges and opportunities for global investors. As the market seeks stabilization, international investors could potentially benefit from lower entry prices and favorable government incentives. However, the ongoing uncertainties necessitate a prudent approach, with an emphasis on understanding local market dynamics and aligning strategies with potential policy shifts. RealEstateAbroad.com advises investors to remain vigilant and responsive to emerging trends, as China's property market continues to evolve amidst economic reforms and shifting consumer behaviors.