The residential and commercial real estate ( CRE ) markets in the Greater Bay Area ( GBA ) – which encompasses key cities in southern China, among them, Shenzhen, Guangdong, Hong Kong and Macau – have largely stabilized in the first half of 2025, although sentiment in Q2 was marred by geopolitical risks, according to a recent report.

Local governments across GBA cities continued the real estate policies – among them, easing restrictions on the demand side and alleviating financial pressures on the supply side – introduced last year through the H1 2025 period with an eye to supporting a stable market recovery, finds the Greater Bay Area Residential and Commercial Real Estate Investment Market H1 2025 Review and H2 Outlook, published by real estate services firm Cushman & Wakefield.

From January to March, the report notes, primary residential market transaction numbers and prices demonstrated growth. Regardless, market sentiment has been weakened since April by uncertainties surrounding the trade tariff war, again prompting potential home buyers to adopt a wait-and-see approach, and resulting in a pause in the upward momentum in home prices.

GBA primary residential sales numbers through H1 2025, the report details, recorded mild year-on-year ( YoY ) growth of 3%. As for the CRE investment market ( large-sized deals at greater than 100 million yuan, or US$13.93 million ), property owners have adjusted their expectations.

The industrial/logistics sector accounted for more than 50% of the total GBA investment consideration in H1 2025, with several large-sized logistics portfolio deals recorded. At the same time, the market, the report notes, has seen increasing interest in the neighbourhood retail sector, where assets with stable rental yields are gaining investors’ attention.

GBA residential market

Following the central government’s reiteration of the need to halt the real estate market decline and spur a stable recovery in its 2025 work report, both the central government and GBA local governments, the report shares, continued to extend market-easing real estate policies from last year through the H1 2025 period. Measures on the demand side, such as “four cancellations” and “four reductions” were extended.

Authorities also focused on alleviating financial pressures on the supply side, aiming to strengthen overall market sentiment and boost buyer confidence. Key initiatives, the report details, included promoting the launch of special-purpose bonds to reclaim and acquire idle land and unsold residential units. Notably, Guangzhou became the first tier-1 city in the country to fully abolish the “three restrictions” in housing policy.

The GBA primary residential market, the report notes, showed resilience in the Q1 period despite being the traditional off-season. Monthly transaction numbers from January to March expanded on the same period last year. However, starting from April, greater uncertainties surrounding the trade tariff war weighed on overall economic performance and dampened residential market sentiment. In turn, more potential home buyers adopted a wait-and-see approach. New home sales in April fell by 16% from March, the report shows, while May and June remained largely stable.

The GBA primary residential market recorded approximately 137,000 transactions in the H1 2025 period, up slightly at 3% YoY, with tier-1 cities, such as Guangzhou and Shenzhen, showing significant growth. However, compared with the significant recovery following last year’s introduction of aggressive easing policies, the H1 2025 total transaction number was down 26% from the H2 2024 level.

In terms of home prices, primary market prices are more swayed by the quality level of newly launched projects. First-hand residential prices in the nine GBA mainland cities, the report shares, showed mixed performances in H1 2025. Developers generally adopted more realistic pricing strategies to attract buyers, actively offloading inventory to improve cash flow.

For secondary home prices, which better reflect current underlying trends, and using Shenzhen as an example, the Cushman & Wakefield Shenzhen mid-to-high-end secondary home price index strengthened by 4.0% from the Q4 2024 level. However, as market sentiment turned more cautious from April, overall prices experienced downward pressure and recorded a quarter-on-quarter decline of 4.4% in Q2, bringing the year-to-date adjustment to a modest -0.5%.

CRE investment market

The GBA CRE property investment market remained resilient in the H1 2025 period, the report points out, with total investment volume reaching 24.7 billion yuan, marking a 108% increase compared to the same period last year, and accounting for around 31% of total investment volume in the Chinese mainland. Among the 35 transactions, 31 were at less than RMB1 billion, reflecting investors’ caution regarding big-ticket transactions.

By property type, industrial and logistics assets accounted for the largest share of total CRE property investment in the GBA by transaction value in H1 2025, with 14 related deals making up more than half of the total investment volume.

Within the industrial and logistics transactions, tier-2 cities, including Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Zhaoqing and Huizhou, recorded a combined transaction volume of 9.6 billion yuan, the report shares, comprising both logistics portfolios and individual warehouse deals. Dongguan, classified as a tier-2 city, stands out as a top choice for logistics investment due to its strategic location, making it the most desirable logistics hub within the GBA and a key focus for investors.

Investment interest in the neighbourhood retail sector also continued to heat up in the H1 period. Assets with stable rental yields and mature operations are favoured by the market, attracting a diverse range of buyers. A total of nine retail sector transactions were recorded in the GBA in H1 2025.

“Looking ahead to H2 2025, among the various types of investment properties, we believe the logistics and commercial sectors will continue to outperform,” says Charli Chan, Cushman & Wakefield’s deputy managing director, capital markets, China. “With the ongoing expansion of cross-border e-commerce, demand for logistics assets has remained strong and continues to attract investor attention. However, the GBA’s warehouse market is expected to see a heavy new supply pipeline over the next two to three years, which will likely lead to a rise in vacancy rates and exert downward pressure on rents.”