By Liangping Gao and Ryan Woo
BEIJING (Reuters) – Weakness in China’s property sector is expected to persist this year with home prices falling nearly 5% and set to remain stagnant in 2026, as low confidence continues to keep buyers at bay while the Sino-U.S. trade war adds further pressure, a Reuters poll showed.
China’s property sector, which plunged into crisis in 2021, has failed to turn a decisive corner despite several rounds of policy support steps, due in part to excessive debt among developers and a stuttering economy.
Home prices are projected to decline 4.8% this year, deeper than a 2.5% drop forecast in February, with the previous estimate of a modest growth in 2026 revised to a flat trajectory, the survey of 12 analysts, conducted between 14-22 May, showed.
Home prices fell 4.8% year-on-year in 2024, according to calculations by E-House, a leading real estate sales and marketing agency in China, based on data from China’s statistics bureau.
A confluence of factors continues to undermine confidence in the sector, including a glut of unsold homes, a sluggish job market, and weakening affordability among potential buyers, said Lulu Shi, director of Asia-Pacific corporate ratings at Fitch Ratings.
“Escalating U.S.-China geopolitical tensions may lead to slower economic growth, further dampening homebuyer sentiment,” said Shi.
In recent weeks, Beijing has rolled out fresh stimulus measures, including reductions in mortgage rates, to shore up the real estate industry, which before the 2021 crisis contributed almost 25% to economic output.
China also rolled out several supportive measures last year, including urging local governments to purchase unsold homes from heavily-indebted developers.
However, these measures have had limited impact in lower-tier cities, where demand remains weak and buyer preference has shifted to higher-tier markets, said Yingxue Ren, associate director of corporate ratings at S&P Global (China) Ratings.
Property sales in 2025 are expected to shrink 5.0%, compared with a 5.7% drop forecast previously. Investment is projected to drop 8.4%, faster than the previously estimated 7.0% decline.
“The tariff war has reinforced Chinese policymakers’ assessment of long-term Sino-U.S. decoupling, triggering a systematic policy shift toward advanced manufacturing and technological self-sufficiency,” said Dan Wang, a director on Eurasia Group’s China team.
“The property sector is no longer seen as a key economic stabiliser,” Wang added.
(Other stories from the Q2 global Reuters housing poll: nL6N3RU0GL)
(Reporting by Liangping Gao and Ryan Woo; Additional reporting by Shuyan Wang; Editing by Shri Navaratnam)
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