The decline in average new-home prices across 70 cities narrowed in March, with first-tier cities improving first

Overview

This report tracks housing price data for 70 cities published by China's National Bureau of Statistics, along with high-frequency real estate indicators. The core conclusion is that the decline in new residential home prices narrowed marginally in March, with first-tier cities posting month-on-month gains, while second-tier and third-tier cities continued to decline and price pressure in the existing-home market remained evident. The report emphasizes that the 70-city data mainly reflect primary-market new-home selling prices, while third-party secondary-market data show that existing-home prices have fallen about 5% to 15% over the past year.

Core views

Goldman Sachs believes that China's real estate prices are still in an adjustment phase, but March data showed localized signs of improvement: the decline in average new-home prices across the 70 cities narrowed slightly, the share of cities with month-on-month price increases rose, and first-tier cities, especially Shenzhen, performed relatively strongly. However, declines deepened in second-tier cities, while third-tier cities still saw sizable declines despite some narrowing, indicating that the market recovery remains uneven. High-frequency transaction data and inventory turnover indicators suggest that demand has not deteriorated further, but are not yet sufficient to prove that a nationwide recovery has taken shape.

Analysis framework

The report uses National Bureau of Statistics data on new residential prices in 70 cities as the basis for observing the primary market, combined with Goldman Sachs' seasonal adjustment and population-weighting methodology to compare month-on-month and year-on-year performance across different city tiers. At the same time, the report cites existing-home price indicators from brokerage firms and third-party platforms to supplement observations of secondary-market price trends, and combines transaction volume and inventory turnover indicators for 30 major cities to assess short-term supply-demand changes.

Methodology notes

• Real estate price tracking70-city new residential price monitoring

  National Bureau of Statistics 70-city data

  The report uses new residential price data for 70 cities released by the National Bureau of Statistics, which mainly reflect changes in primary-market new-home selling prices.

• Data processingSeasonal adjustment and population weighting

  Seasonally adjusted, population-weighted housing price changes

  Goldman Sachs seasonally adjusts the month-on-month housing price data for the 70 cities and weights them by population share, so the results may differ from a simple average.

• City segmentationCity tier classification

  First-tier, second-tier, and third-tier cities

  The report classifies the 70 cities into different tiers according to National Bureau of Statistics standards to compare housing price performance across city levels.

• Cross-validationSecondary-market price indicators

  Third-party data on existing-home prices

  The report uses data from real estate brokerage firms and third-party platforms to supplement observations of existing-home prices, noting that existing-home prices have fallen about 5% to 15% over the past year.

Asset mapping & comparison

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

• China's real estate sector

  Core research subject

  Strengths

  The decline in new-home prices narrowed in March, first-tier cities turned positive, and transaction volume was broadly flat year-on-year.

  Weaknesses

  Second-tier and third-tier cities are still declining, and the existing-home market has seen relatively large declines over the past year.

  Comparison

  First-tier cities performed significantly better than second-tier and third-tier cities, with Shenzhen outperforming other first-tier cities.

  Risks

  A broader spread of price declines, unsustained demand recovery, and slower-than-expected inventory destocking.

• New residential market

  Primary-market price indicator

  Strengths

  The month-on-month decline in new-home prices across 70 cities narrowed from -4.3% in February to -4.1% in March.

  Weaknesses

  The nationwide weighted average price remains in decline and is still negative year-on-year.

  Comparison

  Compared with the existing-home market, new-home data show more evident marginal improvement.

  Risks

  Improvement is concentrated in a small number of cities, and lower-tier cities may continue to drag.

• Existing residential market

  Supplementary secondary-market observation

  Strengths

  The share of cities with month-on-month housing price increases rose somewhat in March.

  Weaknesses

  Third-party data show that existing-home prices still fell 5% to 15% over the past year.

  Comparison

  Existing-home price pressure is greater than in the new-home market, and some third-party data sources have stopped updating or experienced sample changes.

  Risks

  Further declines in existing-home prices may suppress new-home pricing and households' homebuying expectations.

Key data

• Month-on-month change in average new-home prices across 70 cities-4.1%Seasonally adjusted and population-weighted by Goldman Sachs in March; February was -4.3%.
• Year-on-year change in average new-home prices across 70 cities-3.5%March data; February was -3.3%.
• Month-on-month change in new-home prices in first-tier cities+0.4%The first increase since April 2025; February was -0.8%.
• Month-on-month change in new-home prices in Shenzhen+5.3%The most notable increase among first-tier cities in March; February was -0.7%.
• Month-on-month change in new-home prices in second-tier cities-4.7%February was -4.5%, indicating a wider decline.
• Month-on-month change in new-home prices in third-tier cities-5.2%February was -5.4%, indicating some narrowing in the decline.
• New-home transaction volume in 30 citiesBroadly flat year-on-yearHigh-frequency monitoring shows that transaction volume in March and early April was roughly in line with the same period last year.
• Inventory turnover indicator29.3Fell to 29.3 in early April from 29.9 in March, with the decline mainly occurring in second-tier cities.
• Decline in existing-home prices over the past year5% to 15%From data provided by real estate brokerage firms and third-party platforms.

Impact & implications

The marginal improvement in real estate price data helps ease market concerns about a continued acceleration in new-home price declines, especially as first-tier cities turning positive may improve confidence in core cities. However, second-tier and third-tier cities are still declining, and existing-home prices remain under significant pressure, implying that demand along the property chain, developers' sales cash collections, and the household wealth effect still face pressure. For investment research, the near-term focus should be on whether price stabilization spreads to more cities and whether transaction volume and inventory turnover can continue to improve.

Risks

• A recovery in real estate demand may not be sustained, and improved transaction volume may fail to continue.
• Prices in second-tier and third-tier cities may continue to fall, dragging down the national average.
• The relatively large decline in existing-home prices may affect household balance sheets and homebuying confidence.
• Differences in samples and update status across third-party existing-home data sources may affect comparability across data sources.
• The scale of policy support or its transmission effect may fall short of expectations.

What to watch

• Whether the share of the 70 cities with month-on-month increases in new-home prices continues to rise.
• Whether the rise in first-tier city housing prices spreads from Shenzhen to more core cities.
• Whether the decline in housing prices in second-tier cities narrows.
• Whether new-home transaction volume in 30 major cities remains broadly flat year-on-year or turns positive.
• Whether the inventory turnover indicator continues to decline, especially in second-tier cities.
• Whether third-party indicators for existing-home prices show signs of stabilization.