China home prices fall again in August as property slump persists

China's new home prices declined for another month in August, extending a streak of weakness that has kept the world's second-largest economy under pressure as policymakers struggle to arrest a yearslong property downturn.

New home prices fell 0.1% in August from the prior month, matching the pace of decline recorded in both June and July, according to Reuters calculations based on data released Tuesday by the National Bureau of Statistics. On an annual basis, prices dropped 3.0%, narrowing slightly from a 3.2% fall in July — the slowest pace of annual decline this year.reuters+1

The data arrived alongside a broader set of indicators pointing to continued stress in the sector: property sales, investment, and new construction starts all fell sharply in the first eight months of 2026, with property investment plunging 19.9% year-on-year. Household loans, including mortgages, shrank by 202.9 billion yuan ($30.2 billion) in August, following a 460.3 billion yuan contraction in July.wionews+1

Tier-One Cities Show Flickers of Stabilization

Performance was uneven across the country. Tier-one cities — Beijing, Shanghai, Guangzhou, and Shenzhen — saw new home prices edge up 0.1% in August from July, snapping a prior monthly decline, while tier-two and tier-three cities continued to lose ground. Resale prices in top-tier cities also showed modest improvement.realty.economictimes.indiatimes+1

"The year-on-year decline in home prices across cities of all tiers continues to narrow, which shows that the previous sustained downward trend in prices has been contained," said Zhang Dawei, chief analyst at Centaline Property, as quoted by Reuters. Still, he cautioned that a broad nationwide recovery was unlikely in the near term given seasonal headwinds.reuters

Policy Measures Yet to Move the Needle

Beijing last month rolled out a series of measures aimed at stabilizing the market, including extending the maximum mortgage loan term to 40 years from 30 and pushing developers away from the presale model that had fueled homebuyer protests. Analysts said these steps were designed to rebuild confidence over time but were unlikely to tangibly improve housing demand in the short term.realty.economictimes.indiatimes+1

Economic growth slowed to 4.3% in the second quarter, and Tuesday's data suggested continued reliance on external demand to offset weak domestic consumption.reuters

Outlook Darkens Through the Decade

Oxford Economics lowered its forecasts in a research note released Tuesday. "We now expect the housing downturn to persist through the current Five-Year Plan, with residential investment not recovering until 2031," wrote Sheana Yue, senior economist at the firm. "A more proactive policy response is increasingly needed to revive domestic demand." Oxford Economics cut its 2027 growth forecast to 4.3%, citing the prolonged property drag.reuters