China’s housing prices will stabilize in 2026 after falling slightly

Written by Liangping Gao and Ryan Woo

BEIJING (Reuters) – China’s house prices are expected to fall at a slower pace this year and next, and stabilize in 2026, a Reuters survey showed, as a number of support measures to reverse a years-long property slump begin to bear fruit.

Analysts in the survey now expect home prices to fall 6.0% in 2024, compared with an 8.5% decline noted in the previous survey in August. In October, new home prices fell the most year-over-year since 2015, but the month-over-month decline has slowed.

Prices are likely to decrease by 2.0% in 2025, and increase by 1.6% in 2026 compared to 0.0% in the last study.

China has been ramping up efforts to stem a real-estate slump that began in 2021, which has strained local governments and frustrated homeowners and businesses tied to a sector that once accounted for a quarter of the country’s economic activity.

Policymakers changed the rules for the property sector at the end of September, including a reduction in the minimum down payment to 15% for all housing categories and a relaxation of home purchase restrictions.

The Ministry of Finance introduced a tax break to stimulate demand in November. But a broader crisis in consumer and investor confidence has kept consumers’ wallets tight.

“The decline in housing prices in the current real estate cycle is mainly influenced by supply and demand, as well as housing expectations,” said Gao Yuhong, manager of CSCI Pengyuan Credit Rating.

“It is expected that housing prices in first-tier cities will lead to stability in the second half of next year,” said Gao.

A survey of 13 analysts conducted from November 15-28 showed real estate sales are expected to decline 5.0% in 2025, below a 10.0% decline forecast in the previous survey, while investment was expected to decline 8.0% compared to a decline forecast of -7.5%. in August.

“Since the end of September, the combined effect of the cascade of monetary policy, finance, housing and other measures has led to a large recovery in housing sales in October, which shows a positive trend of stability,” said Wang Xingping, a senior analyst. at Fitch Bohua.

“The policy of ‘allowing the use of special bonds to buy land and existing houses’ is an important step in reducing inventories and stabilizing the property market, but further efforts are still needed,” Wang said.

(More news from the Q4 global Reuters housing survey)