Pictured here is a construction site of property developer Hongkong Land, in Shanghai on Nov. 4, 2024.
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China’s home prices are expected to fall at a slower pace this year and next, and stabilize in 2026, a Reuters poll showed, as a slew of support measures to reverse a years-long property slump start to bear fruit.
Analysts in the poll now expect home prices to fall 6.0% in 2024, versus a 8.5% decline tipped in a previous survey in August. In October new home prices fell the most year-on-year since 2015, but month-on-months falls have narrowed.
Prices are likely to dip 2.0% in 2025, and rise 1.6% in 2026 compared to 0.0% in the last survey.
China has been scaling up efforts to arrest the real-estate downturn that began in 2021, which has squeezed financing for local governments and discouraged home owners and businesses tied to a sector that once accounted for a quarter of the country’s economic activity.
Policymakers changed rules for the property sector at the end of September, including a cut in the minimum down payment ratio to 15% for all housing categories and a relaxation in home purchase restrictions.
The finance ministry rolled out tax breaks to spur demand in November. But a broader consumer and investor confidence crisis has kept prospective buyers’ wallets glued shut.
“The decline in home prices in the current real estate cycle is mainly influenced by supply and demand, and home purchase expectations,” said Gao Yuhong, a manager at CSCI Pengyuan Credit Rating.
“It is expected that home prices in first-tier cities will take the lead in stabilising in the second half of next year,” said Gao.
The poll of 13 analysts conducted from Nov. 15-28 showed property sales are expected to shrink 5.0% in 2025, less than the 10.0% slump forecast in the previous poll, while investment was expected to fall 8.0% against a 7.5% slump forecast in August.
“Since end-September, the combined effect of the policy cascade of monetary, fiscal, real estate and other measures has led to a significant recovery in housing sales in October, indicating a positive trend of stabilization,” said Wang Xingping, a senior analyst at Fitch Bohua.
“The policy of ‘allowing to use special bonds to purchase land and existing housing’ is an important measure in reducing inventories and stabilizing the property market, yet continuous efforts are still required,” Wang added.