China's residential property prices fell 1.4 percent on the year in February after dropping 0.7 percent in January. This is the biggest year-over-year decline since January 2023, with the size of the decline likely impacted to some extent by the timing of lunar new year holidays.

China's property market has been very weak for nearly two years, representing a major drag on investment and consumer spending. Officials have taken steps in recent months to support the market, including a cut in the five-year loan prime rate last month which should reduce mortgage rates for new borrowers, but today's data again indicate that sentiment and conditions remain very weak for now.

China’s House Price Index measures the average price of newly built homes in 70 Chinese cities. More detailed data is also provided for each of these cities, including separate data for different sized properties. Data for sales price, floor space and amount of money are sourced directly from the network transaction records data of local real estate management departments.

Home values affect much in the economy, especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. Rising prices increase consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit. Looking at the detailed data for each of the 70 cities also provides information on the strength of local property markets, with implications for regional growth rates.