A recent Reuters poll highlighted a dimmer outlook for China's property sector despite expectations of price stabilization next year. Analysts predict a faster decline in home prices this year, with sluggish growth resuming in 2026, albeit at a slower pace than previously expected. The poll of 10 analysts, conducted from February 12-24, underscores the prolonged nature of the market's stabilization due to factors such as high housing inventory, weak demand, and a long-term population decline.
China's property sales are anticipated to have dropped more than forecasted in November, while investment is expected to decline gradually. To address the crisis in the real estate sector, China implemented significant measures last year, including urging local governments to buy unsold homes from debt-laden developers. However, these efforts have fallen short, prompting calls for new solutions such as large-scale state purchases of vacant apartments.
Analysts foresee a 2.5% decline in home prices this year and a modest 1.2% increase in 2026, lower than previous estimates. Variability in home price trends is expected across different cities and regions, with tier-one and major tier-two cities projected to see a slight decline in prices, while lower-tier cities may face a more extended period of decline.
Projections suggest a 5.7% decrease in property sales this year and a 7.0% decline in investment, reflecting a bleaker outlook compared to earlier forecasts. Analysts recommend lowering thresholds for home purchases, alongside implementing risk controls for real estate companies to boost buyer confidence.
Market watchers are anticipating significant policies to support the real estate sector in China's upcoming annual parliamentary meeting. The meeting is expected to prioritize stabilizing the housing market, promoting urban village renovation, supporting housing demand, managing new land supply, and reducing housing inventory, according to UBS analysts.