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China's home prices poised to stabilize by 2026 amid slowing decline

Posted on November 29, 2024 |

China expects home prices to decline more slowly in 2024 and 2025, with a forecasted drop of 6.0% in 2024, compared to an earlier estimate of 8.5%.

New home prices fell the most year-on-year since 2015 in October, but monthly declines have started to slow.

Home prices are expected to fall 2.0% in 2025, then rise by 1.6% in 2026, a more optimistic outlook than the previous forecast of no growth.

The real estate slump, which began in 2021, has affected local government finances and discouraged investment in a sector that once contributed a quarter of China’s GDP.

In late September, the government introduced measures to support the housing market, including reducing the down payment ratio to 15% and easing home purchase restrictions.

The finance ministry introduced tax breaks in November to help boost housing demand.

Despite these efforts, a lack of confidence from consumers and investors continues to hold back many potential buyers.