(Yicai) May 27 -- Secondhand homes priced below CNY3 million (USD442,426) accounted for more than 70 percent of all secondhand housing transactions in Beijing and Shanghai as China’s top-tier cities showed signs of recovering market activity this month, driven mainly by first-time homebuyers seeking lower-priced properties.

Such homes made up 78 percent of total secondhand housing transactions in Beijing and 70 percent in Shanghai as of April, according to data from property analyst Puri Real Estate. The increase in lower-priced home sales came as transaction volumes rose, the number of listed properties declined, and housing prices began to stabilize in the two cities.

Beijing recorded sales of 18,000 secondhand homes in April, the highest level for the month in the past five years, while Shanghai sold 29,000 secondhand commercial homes during the same period, remaining at a relatively high level compared with recent years. Shanghai also recorded more than 1,000 daily transaction registrations on eight separate days in April.

The momentum continued this month. Secondhand home transactions in Beijing and Shanghai rose 15 percent and 29 percent, respectively, from a year earlier as of May 24, according to the China Index Academy. Shanghai registered over 1,660 online transaction filings on May 10, setting a new single-day high in the past five years.

Lower-Priced Homes Dominate Transactions

The China Index Academy said secondhand housing transactions in first-tier cities continue to concentrate in lower-priced properties because previous declines in housing prices brought some homes into price ranges affordable for first-time buyers. The improved affordability and value-for-money appeal encouraged some previously cautious buyers to enter the market.

At the same time, steep price declines in lower-priced homes have weakened homeowners’ ability to upgrade to better properties after selling their existing homes, as proceeds from sales are no longer sufficient to support large down payments. Under such conditions, some families holding multiple properties have become more inclined to sell homes to raise cash, resulting in a relatively smaller share of upgrade-oriented housing transactions.

Huatai Securities said falling home prices in major Chinese cities in 2025 were partly linked to a weakening home replacement cycle, particularly a disconnect between entry-level buyers and demand for upgraded housing. Increased transactions of lower-priced secondhand homes this year have laid the groundwork for reviving the replacement cycle, but whether the recovery can spread to higher-priced homes remains uncertain.

Editor: Emmi Laine