Tier-1 city home prices improved in a “spring rebound,” but the probability of a nationwide policy U-turn remains low

Overview

The report focuses on the cyclical recovery of the China real estate market in spring 2026. JPMorgan notes that the housing activity index in March continued a modest rebound from the trough around end-2025. New-home and resale prices in tier-1 cities improved noticeably, and core cities including Shanghai, Beijing, Guangzhou, and Shenzhen are being supported by recent easing measures. However, the report emphasizes that the current recovery remains concentrated in tier-1 and core cities, and has not yet formed a sustained, synchronized rebound across transaction volume, prices, and inventories across city tiers, so a durable market bottom cannot yet be confirmed.

Core views

The core view is that short-term improvement is visible, but bottom confirmation is still premature. On one hand, post-Spring Festival resale activity in second-hand housing has helped core cities warm up; cities such as Shanghai have seen active trading after easing restrictions on purchase eligibility, social-security contribution tenure, housing provident fund loans, and housing tax rules. On the other hand, positive growth in resale transactions is not unprecedented, and listing-price indices for tier-1 resale housing remain soft, with inventory pressure still high. On policy, the April Politburo could be an observation window, but the report argues that the probability of a nationwide housing policy U-turn is low, with policy more likely to continue with city-specific measures, partial easing, and pre-financed fiscal support.

Analysis framework

The report combines the JPM housing activity index, the NBS 70-city housing price metrics, new-home sales, new starts, completions, resale transactions, months of inventory, Centaline sales-manager confidence and listing-price indices, and local policy and special-bond issuance data to assess whether the market is moving from short-term rebound to a sustainable recovery.

Methodology notes

• Real estate cycle trackingJPM housing activity index

  Uses sales, new starts, completions, prices, and land-related indicators to gauge real estate activity strength.

  The index shows that March housing activity continued to rise moderately from the end-2025 trough, but is still not enough to confirm a cyclical bottom.

• Price monitoringNBS 70-city housing prices

  Tracks month-over-month changes in new and resale prices and the divergence by city tier.

  In March, month-over-month declines in both new and resale prices across 70 cities narrowed, with first-tier city prices turning positive, which the report cites as key evidence of the spring rebound.

• Policy catalyst analysisPolitburo meetings and local easing watch

  Assesses policy intensity through central meetings, government work reports, local purchase policies, and the allocation of special bonds.

  The report finds central authorities still emphasizing housing stabilization, but no clear nationwide mega-stimulus signal; policy emphasis remains on local-level easing and front-loaded fiscal support.

• Bottom confirmation frameworkThree-dimensional validation of transactions, prices, and inventories

  Only when transactions, prices, and inventories show broad improvement for multiple consecutive months and spread from top-tier to at least second-tier cities does the market approach sustainable recovery.

  Current improvements do not yet meet this condition, so the report does not view the property market as having formed a durable bottom.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Chinese real-estate developers

  directly relevant

  Strengths

  Price improvement in tier-1 cities, the warming of secondary-home transactions in core cities, and continued local policy easing could improve sales and cash-flow expectations in the near term.

  Weaknesses

  New-home sales, new starts, and completions are still declining year over year, inventories remain elevated, and prices are still far below peaks.

  Comparison

  Core cities and the resale market are performing better than lower-tier cities and the new-home market.

  Risks

  Insufficient nationwide policy support, slow stock reduction, renewed price weakness, and persistent financing and credit pressure.

• Chinese local-government special bonds and LGFV-related assets

  indirectly relevant

  Strengths

  Front-loaded special-bond issuance and real-estate-linked allocations to urban renewal, urban village redevelopment, and land reserves can help support part of local investment and the land market.

  Weaknesses

  The scale of special bonds for buying existing housing for affordable-housing use remains small, with limited nationwide traction on stock reduction.

  Comparison

  Fiscal tools are more directed toward urban renewal and land reserves than comprehensively taking over private housing inventory.

  Risks

  Pressure on local finances, insufficient project returns, and weaker-than-expected land-market recovery.

• Real-estate supply chain and macro risk assets

  macro transmission-relevant

  Strengths

  If spring transactions persist, home furnishings, building materials, finance, and consumption sentiment could benefit on the margin.

  Weaknesses

  The report expects sales, starts, completions, and prices to continue shrinking in 2026, so the foundation for property-chain demand recovery remains weak.

  Comparison

  Policy-driven short-term trading opportunities may be stronger than fundamental-driven, sustained recovery.

  Risks

  Disappointed policy expectations, non-sustainable transaction rebound, and failure of second-tier and lower-tier cities to follow through.

Key data

• March new-home sales YoY-15.7%Narrowed versus -21.8% in Jan-Feb.
• March new starts YoY-20.3%Improved from a decline of around -23.3% in Jan-Feb.
• March completions YoY-25.7%Slightly improved from -26.9% in Jan-Feb.
• Month-over-month new-home prices in 70 cities-0.21%The unseasonally adjusted MoM decline in March narrowed from -0.28% in February.
• Month-over-month new-home prices in tier-1 cities+0.2%Shanghai +0.3%, Guangzhou +0.3%, Shenzhen +0.2%.
• Month-over-month resale prices in 70 cities-0.24%Clearly narrowed from -0.43% in February.
• Month-over-month resale prices in tier-1 cities+0.4%Beijing +0.6%, Shanghai +0.4%, Shenzhen +0.4%.
• New-home prices versus 2021 peak-13.4%Shows prices are still in a deep adjustment range.
• Resale prices versus 2021 peak-22.2%The cumulative adjustment in resale prices is larger.
• 1Q26 local government special bond issuanceCNY 1.2 trillionOf this, approximately CNY 225 billion was real-estate related, skewed toward urban renewal, urban village redevelopment, and land reserves.

Impact & implications

For investment judgment, the report signals that short-term sentiment and core-city activity in Chinese real estate may be supported by policy fine-tuning, the launch of high-quality projects, and warmer land supply, but mid-term fundamentals remain weak. If policy remains largely at the local level, real-estate investment, new-home sales, and prices may continue to weigh on macro growth and real-estate credit repair. Only if China were to see a centrally led large-scale stabilization fund, stock-reduction efforts, and a full removal of purchase restrictions could that amount to a stronger trend-reversal signal.

Risks

• The spring rebound may be only a stage-one transaction pickup in core cities and may not represent a nationwide market bottom.
• The tier-1 resale listing-price index remains weak, so the durability of price improvement is uncertain.
• Inventories remain high, and if de-stocking does not accelerate, price and developer cash-flow pressure will persist.
• If the April Politburo meeting does not deliver a strong policy signal, market expectations for a nationwide policy turn may be disappointed.
• Local-level easing may not substitute for a centrally led large-scale stock reduction and stabilization funds.
• New-home sales, new starts, completions, and prices may continue to decline year over year in 2026.

What to watch

• Whether the April Politburo meeting releases a stronger real-estate policy signal.
• Whether core-city supply and sales of high-quality new launches sustain through April and May.
• Land auctions and SOE-supported stock-piloting activity in core cities such as Shanghai, Beijing, Hangzhou, Nanjing, and Suzhou.
• Whether first-tier cities see synchronized improvement in resale listing prices and transaction volume.
• Whether the improvement can spread from first-tier cities to at least second-tier cities.
• Whether the share of local special bonds used to buy existing housing and build affordable housing expands.
• Whether the Centaline sales-manager confidence index and resale listing-price index turn up again.