New home prices in China rose 0.05% in March 2026.

The Chinese real estate market has just shown the first signs of recovery, with new home prices in 100 cities rising 0.05% in March 2026. According to data released by the China Index Academy on April 1st, this increase ended the 0.04% decline recorded in February 2026.

High-quality supply drives the market.

China Index Academy, one of China's leading real estate research organizations, said that the increased supply of high-quality projects in key cities was the main factor driving new home sales in March 2026. The focus on segments that meet actual demand has helped to improve market confidence to some extent.

However, analysts believe the outlook remains uncertain. The recovery in April 2026 is seen as a crucial milestone in determining the overall market trend this year. If major cities maintain their growth momentum, buyer sentiment may stabilize.

Challenges arising from the liquidity crisis

Despite positive signs, China's real estate sector remains in a prolonged downturn stemming from the tightening of lending policies for development companies since 2020. This situation has put significant pressure on liquidity, preventing many businesses from completing sold projects or fulfilling their debt obligations.

In addition, the current recovery also faces several internal obstacles:

• Labor market:Declining income directly impacts people's ability to pay.
• Inventory level:The high rate of unsold homes is putting pressure on overall prices.
• Competition from the old house:Buyers are increasingly turning to the used home market due to competitive pricing, making it difficult to sell new homes.

In addition to internal factors, the Chinese economy also faces pressure from increasing protectionist trade trends and the impact of geopolitical conflicts in the Middle East. This complicates Beijing's efforts to rebalance its economy, as real estate is a crucial pillar accounting for a large proportion of GDP.