The housing prices in first tier cities have rebounded across the board, and China's real estate market may usher in a turning point

Rajiv Batra, a strategist at JPMorgan in Singapore, has made it clear that China's long sluggish real estate market is likely to have reached a turning point, and the industry is expected to gradually emerge from the adjustment period and move towards a stage of stabilization and recovery.

1、 Data evidence: First tier cities are all in the red, and Guangzhou has become a benchmark for recovery

The comprehensive rise in housing prices in first tier cities in March injected strong confidence into China's real estate market. According to data from the National Bureau of Statistics, in terms of newly-built commercial residential properties, Beijing remained unchanged month on month, while Shanghai, Guangzhou, and Shenzhen rose by 0.3%, 0.3%, and 0.2% respectively; In terms of second-hand residential properties, Beijing, Shanghai, Guangzhou, and Shenzhen rose by 0.6%, 0.4%, 0.2%, and 0.4% respectively. The four major first tier cities achieved a month on month overall increase, breaking the previous pattern of multiple rounds of "differentiated rise and fall".

Among them, the rebound performance in Guangzhou is the most iconic. It is reported that the second-hand housing prices in Guangzhou have continued to decline month on month since May 2023, while the first-hand housing prices have entered a downward trend since June 2023. After nearly three years, both the first and second-hand housing prices have finally increased month on month, making it the city with the most distinct momentum of recovery from the Soviet Union among first tier cities. From the perspective of market performance, the Tianhe Machang plot in Guangzhou has broken the record for land prices, with the core areas of luxury homes and improved properties selling well. The number of second-hand housing listings has fallen from last year's high, and the reluctance of homeowners to sell has increased. The bargaining space has narrowed to less than 5%, forming a virtuous cycle of "stabilizing second-hand demand and keeping up with new housing improvements".

2、 Institutional prediction: Morgan Stanley predicts that the real estate market may reach a turning point, supported by two major factors for recovery

The comprehensive recovery of housing prices in first tier cities has also prompted international institutions to make positive predictions about the prospects of China's real estate market. Rajiv Batra, a strategist at JPMorgan in Singapore, said that after a long-term adjustment, the Chinese real estate market is likely to have reached a turning point and is expected to gradually bottom out and rebound. This recovery trend will also provide positive support for the Chinese stock market, making Chinese stocks perform better than other emerging market countries in 2026.

Rajiv Batra further analyzed that the recovery of the real estate market mainly relies on two core driving factors: firstly, the continuous transmission of the rebound effect of the Hong Kong real estate market. Since 2025, the Hong Kong real estate market has risen cumulatively, and it will continue to heat up in March 2026. This positive confidence is gradually spreading to core cities in mainland China such as Shanghai, Beijing, and Shenzhen; The second is that the "wealth effect" brought about by the rise in the stock market has begun to emerge. In the early stage, the Chinese stock market rebounded significantly, investors' wealth increased, and some funds gradually flowed into the real estate market, driving the release of housing demand.

3、 Market interpretation: The recovery highlights structural factors, and steady progress is still needed to promote the recovery

Industry insiders believe that the overall rise in housing prices in first tier cities in March is the result of a combination of policy support, demand release, and market confidence repair. Since the end of 2024, various regions have continuously optimized their real estate policies, reducing down payment ratios, lowering mortgage interest rates, optimizing purchase and loan restrictions, and combining them with replacement support policies such as "sell one buy one", effectively stimulating demand for essential needs and improvement. First tier cities, as core areas with concentrated population inflows and high-quality resource support, have taken the lead in unleashing demand.

It should be noted that the current recovery of the real estate market still presents "structural" characteristics. Except for first tier cities, although the decline in housing prices has narrowed in second - and third tier cities, comprehensive stabilization has not yet been achieved. Among the 70 large and medium-sized cities, although the number of cities with month on month increases in housing prices has increased, the overall situation is still in the pattern of "core cities leading stability, second tier cities recovering, and third - and fourth tier cities bottoming out". Ke Er Rui Research pointed out that the second quarter of 2026 will be a key observation period for the confirmation of the bottom and structural differentiation of the Chinese real estate market. The market as a whole is in a bottoming out stage of transition from "stopping the decline" to "stabilizing", and the law of "quantity first, price first" still applies.