Confidence, policy, and purpose: The keys to real estate stability in China

Insights from leading industry experts as the residential sector enters a new chapter 

Early signs of recovery in China’s real estate sector, especially in tier-one cities, are stirring cautious optimism. Market watchers point to a convergence of buyer sentiment and government policy as crucial drivers of stability and growth heading into 2025. But progress is not even across regions. 

“Buyer sentiment and government policy remain central to the stability of China’s residential real estate market in 2025,” said Ken Ip, Chairman of the Asia MarTech Society and Chairperson of the PropertyGuru Asia Property Awards (Mainland China) Judging Panel. “Government measures—such as mortgage rate cuts, funding support, and targeted incentives—have helped revive confidence, particularly in tier-one cities, where recovery is more visible.” 

According to South China Morning Post, China’s core cities like Shanghai and Beijing are showing strong signs of market activity, largely due to policy-led recoveries. In contrast, tier-three and tier-four cities continue to experience price drops and oversupply. 

“Sentiment is improving, but it’s not yet uniform,” Ip added. “While wealthier buyers are re-entering the market, many still seek greater certainty in pricing trends and future demand. The next phase of stability depends on whether policy momentum aligns with sustained consumer confidence, ensuring recovery spreads beyond core cities. “ 

Understanding the mechanics of recovery 

James Woo, Executive Director and Co-Head of Valuation China at Colliers and a fellow PropertyGuru Asia Property Awards (Mainland China) judge, outlined the recovery with precision.
“Positive buyer sentiment can significantly influence demand. When potential buyers feel confident about the market’s trajectory and perceive favourable conditions, they are more likely to engage in transactions. This confidence can be bolstered by signs of economic stability and growth, as well as by improved access to financing.” 

In May 2025, new home prices rose 0.30 percent month-on-month nationwide, revealed China.org.cn. Shanghai saw a 1.47 percent increase, while Guangzhou followed with a 1.25 percent uptick. Secondary transactions in Shanghai also grew 14 percent year-on-year, sustaining momentum for eight consecutive months. 

Anecdotal evidence supports this upward trend. Woo noted, “Shanghai’s Runyun Jinmao Mansion sold CNY1.45 billion (USD201 million) in just 36 minutes; nine projects achieved same-day sellouts.” 

Beijing, too, remains resilient. Though secondary transactions dipped 8.3 percent month-on-month, they still reached 14,277 units in May. 

A dual-fronted policy approach 

Woo pointed to the twin levers of demand and supply shaping the recovery. On the demand side, Reuters reported mortgage rate cuts pushing first-home buyer rates below three percent, following a cut in the LPR to 3.50 percent. 

To tackle inventory, local governments in Guangzhou, Chongqing, and Kunming introduced housing voucher pilots and trade-in programmes to encourage upgrades. Meanwhile, on the supply side, more than CNY700 billion in special bonds was allocated for land acquisition, while “whitelisted” projects received CNY8.54 trillion in developer financing. 

Tier-one cities are also piloting urban renewal projects. ECNS added that Shanghai and Shenzhen are targeting 1 million units through urban village conversion to address housing supply while improving affordability. 

Celebrating innovation and resilience 

Recognising the projects that are leading this evolution, the 19th PropertyGuru Asia Property Awards Grand Final 2024 honoured several developers from Mainland China, Hong Kong, and Macau: 

• Zhuhai Huafa Properties Co., Ltd. was named Best Developer (Asia) for its visionary approach and market leadership. 

• PANO HARBOUR by China Resources Land (Overseas) Limited and Poly Property (Hong Kong) Co., Limited won Best Luxury Waterfront Condo Development (Asia). 

• 1 Ki Lung Street by Lofter Group Limited was awarded Best Connectivity Condo Development (Asia), a nod to the growing demand for location-integrated homes. 

“At the PropertyGuru Asia Property Awards, we are proud to recognise the developers and projects that not only respond to market challenges with innovation and quality, but also contribute to the sustainable growth and vibrancy of our cities,” said Ip. 

He added: “As we celebrate excellence in design, sustainability, and community-building, I am confident that our region’s real estate leaders will continue to inspire and drive positive change for years to come.” 

Roadblocks remain for wider recovery 

Despite robust activity in major metros, Oxford Economics warned that lower-tier cities are still facing soft demand and continued oversupply. In May, home prices in these cities declined 0.11 percent month-on-month, with buyers holding back amid price uncertainties. 

Woo agreed, adding, “The broader recovery will depend on deeper structural reforms and international green standards adoption. Market stability hinges on aligning buyer confidence with targeted policies (cost reduction, inventory absorption).” 

Looking ahead, Woo believes policies like debt-for-sustainability swaps and precision land-use frameworks will be critical. “The time for structural reform is now,” he said. “By 2025, tier-one cities may consolidate gains, while broader recovery will require long-term commitment.” 

Real estate with purpose 

With recovery underway in the largest cities, the focus is now shifting to meaningful and sustainable development. As Woo noted, “Quality housing and long-term policy commitment will determine if the ‘stop-decline stabilisation’ goal is achievable by late 2025.” 

For both Woo and Ip, celebrating innovation is not just about prestige but about inspiring a region-wide mindset shift. Developers across China are no longer just building units—they are shaping the future of how communities live, grow, and thrive. 

This article was originally published on asiapropertyawards.com. Write to our editors at [email protected].