Sales drop compared to Q4 2024 because of seasonal factors

• Luxury apartment sales in Q1 2025 dropped compared to Q4 2024, largely because developers had launched a series of discounts last quarter to meet annual sales targets. A total of 733 luxury apartment units were sold in Q1 2025, down 45.0% q-o-q but up 20.0% y-o-y.
• Beijing’s home-buying policy remained largely unchanged in Q1 2025. The government’s work report for 2025 emphasised that it would continue efforts to stem the downturn and restore stability in the real estate market in 2025.

Highest-ever first-quarter new supply recorded

• Under easing monetary policies and continued positive support from the government, developers accelerated the launch of new houses in Q1 2025. A total of 3,071 new units were launched in Q1 2025, marking the highest first-quarter number ever recorded.
• Land supply continued to pick up in Q1 2025, with 11 plots transacted by mid-March. Led by three high-quality land plots in Haidian District, the average premium rate in Q1 2025 rose to 11.0%, the highest level recorded since 2023.

The growth rate of high-end housing prices turns positive

• The sales of high-quality projects in core locations have driven up housing prices. The negative growth rate of luxury apartment prices in the previous quarter turned positive in Q1 2025, with a slight increase of 0.3% q-o-q recorded.
• The downward trend of overall rents continued, with a q-o-q decline of 2.1% recorded. Tenants remained cost-conscious, wanting to allocate limited budgets to house leasing. Landlords had to offer further rent reductions to attract tenants.

Outlook: Residential market recovery is likely to persist

• The continuation of favourable policies has sent a positive signal to the market and is expected to further restore the expectations of developers and buyers. The gradual recovery of market activity will attract buyers with a wait-and-see attitude.
• As market confidence and demand gradually recover, landlords’ willingness to continue to reduce prices will be weakened. High-end residential price declines are expected to narrow in both the primary and secondary markets compared to previous year.