By Liangping Gao and Ryan Woo
BEIJING, Dec 5 (Reuters) – China’s home prices are forecast to decline 3.7% this year, broadly in line with the previous poll, and to continue falling through 2026 before stabilising in 2027, the latest quarterly Reuters survey showed.
Prices are projected to fall 2.8% in 2026, a sharper decline than the 0.5% drop forecast in the previous poll, and to remain flat in 2027 versus an earlier prediction of 2.0% growth, according to the survey conducted from November 17 to December 3.
The market remains under pressure due to persistent structural headwinds, including demographic changes, employment uncertainty, low affordability, and high unsold inventory, said Lulu Shi, Director of Asia-Pacific Corporate Ratings at Fitch Ratings.
China’s property sector has been reeling since tighter regulations sparked a 2021 liquidity crunch among real estate developers, with many subsequently defaulting on debt.
While authorities rolled out a series of measures, including in the second half of 2024 to support the sector, large-scale new stimulus has been withheld this year.
After cutting mortgage costs for some buyers in the first half of 2025, policymakers have repeatedly pledged to stabilise the market.
“We don’t expect housing prices to stabilise before the end of 2027. The supply glut remains severe, keeping downward pressure on prices,” said Zichun Huang, China economist at Capital Economics.
“While policymakers could engineer a rebound in prices by deploying substantial fiscal resources to buying up unsold homes, most signs suggest they are unwilling to do so and that property support measures will continue to underwhelm.”
The survey also pointed to a steeper contraction in property investment and sales this year than previously expected, with declines of 15% and 8%, respectively.
Stabilising the market will require a comprehensive policy approach, including measures to boost the broader economy, improve labour conditions, and reduce excess inventory, Fitch Ratings’ Shi said.
“Home prices could fall more than we forecast if macro-level government policies fail to boost confidence, potentially causing further market disruption through rising residential mortgage delinquencies and increased instances of negative equity.”
(Other stories from the Q4 global Reuters housing poll)
(Reporting by Liangping Gao and Ryan Woo; Editing by Shri Navaratnam)
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