According to a research report, in August 2025, the month-over-month decline in new home sales prices across 70 cities remained stable, while the year-over-year decline narrowed, with first-tier cities showing reduced price declines for new homes. For second-hand homes, month-over-month price declines widened while year-over-year declines narrowed. Among the key 35 first and second-tier cities, August new home prices showed more declines than increases both month-over-month and year-over-year, with Shanghai being the only first-tier city to achieve growth in new home prices both month-over-month and year-over-year. Since the beginning of this year, China's real estate market has been moving toward stabilization and recovery. During this stabilization process, housing prices may still experience minor fluctuations, with expectations for further market stability under policy support.
**Shanghai Continues to Lead New Home Growth, Second-Hand Home Price Declines Narrow Year-over-Year**
The National Bureau of Statistics released data on residential sales price changes in 70 major cities for August 2025. For new commercial residential properties month-over-month, first, second, and third-tier cities recorded -0.1%, -0.3%, and -0.4% respectively (compared to -0.2%, -0.4%, and -0.3% in July), with the overall 70-city month-over-month decline at -0.3%, unchanged from July's decline rate.
Year-over-year, first, second, and third-tier cities recorded -0.9%, -2.4%, and -3.7% respectively (compared to -1.1%, -2.8%, and -4.2% in July), with the overall 70-city new home price year-over-year decline narrowing by 0.4 percentage points to 3.0%.
Regarding the number of cities with rising and falling new home prices across the 70 cities, in August 2025, 9, 4, and 57 cities experienced month-over-month price increases, stability, and declines respectively (compared to 6, 4, and 60 cities in July). Year-over-year, 5, 0, and 65 cities experienced price increases, stability, and declines respectively (compared to 5, 0, and 65 cities in July).
**Second-Hand Home Prices Show Narrowing Year-over-Year Declines, Widening Month-over-Year Declines**
For second-hand residential properties month-over-month, August saw a -0.6% decline across 70 cities, with the decline widening by 0.1 percentage point. First, second, and third-tier cities recorded -1.0%, -0.6%, and -0.5% respectively (compared to -1.0%, -0.5%, and -0.5% in July).
Year-over-year, 70-city second-hand home prices declined by -5.5%, with the decline narrowing by 0.4 percentage points. First, second, and third-tier cities recorded -3.5%, -5.2%, and -6.0% respectively (compared to -3.4%, -5.6%, and -6.4% in July), with declines widening by 0.1 percentage point, narrowing by 0.4 percentage points, and narrowing by 0.4 percentage points respectively.
In August 2025, 1, 0, and 69 cities experienced month-over-month second-hand home price increases, stability, and declines respectively (compared to 1, 1, and 68 cities in July). Year-over-year, 0, 0, and 70 cities experienced price increases, stability, and declines respectively (compared to 0, 0, and 70 cities in July). Second-hand home prices across all 70 cities have declined year-over-year since early 2024.
**Shanghai Leads in New Home Growth Both Month-over-Month and Year-over-Year, All 35 Key Cities Show Second-Hand Home Price Declines**
Among the key 35 first and second-tier cities, August 2025 new home prices showed more declines than increases both month-over-month and year-over-year. Month-over-month, 7 cities including Shanghai and Hangzhou achieved increases, while year-over-year, 5 cities including Shanghai and Hangzhou posted gains, with Shanghai leading the 35 cities at +0.4% month-over-month and +5.9% year-over-year. Shanghai was the only first-tier city to achieve new home price growth both month-over-month and year-over-year.
For cumulative January-August year-over-year performance, Shanghai and Taiyuan led the 35 cities with +5.8% and +1.1% respectively.
**Investment Recommendations**
In August 2025, new home sales prices across 70 cities maintained stable month-over-month declines while year-over-year declines narrowed, with first-tier cities showing reduced new home price declines. For second-hand homes, month-over-month declines widened while year-over-year declines narrowed. Since the beginning of this year, China's real estate market has been moving toward stabilization and recovery. During this stabilization process, housing prices may still experience minor fluctuations, with expectations for further market stability under policy support. Under more proactive fiscal policy and moderately accommodative monetary policy, existing inventory acquisition and urban village renovation work is expected to accelerate, improving housing supply-demand dynamics and accelerating the stabilization and recovery process.
Recommended targets:
(1) Strong credit property developers well-positioned in cities with solid fundamentals and skilled at capturing demand from upgrading buyers: GREENTOWN CHINA (03900), China Merchants Shekou (001979.SZ), China Overseas Land & Investment (00688), C&D International (600153.SH), Binjiang Group (002244.SZ), C&D International Group (01908).
(2) Companies with dual residential and commercial property development that benefit from both real estate recovery and consumption promotion policies: CHINA RES LAND (01109), Seazen Holdings (601155.SH), Longfor Group (00960).
(3) Quality property management companies with outstanding service quality under the "good housing, good service" policy: CHINA RES MIXC (01209), GREENTOWN SER (02869), Poly Property Services (06049), China Merchants积余 (001914.SZ), Binjiang Service (03669), C&D Property (02156).
**Risk Warnings**
Industry sales recovery may fall short of expectations, policy relaxation may be slower than anticipated.