By Liangping Gao and Ryan Woo
BEIJING, March 13 (Reuters) – China’s home prices are expected to fall at a faster pace than was previously forecast before stabilising in 2027, a quarterly Reuters poll showed, as the property sector continues to grapple with high inventories and analysts call for stronger policy support.
Home prices are projected to decline 4.0% in 2026, steeper than the 2.8% drop in the previous poll, while prices are expected to remain flat in 2027, unchanged from the earlier forecast, according to the survey conducted from March 2 to 12. Prices are then expected to edge up 0.5% in 2028.
The property sector, which was once a more significant driver of economic growth, remains stuck in a prolonged downturn that has eroded household wealth and weighed on consumption in the world’s second-largest economy.
“The sector still faces several structural challenges, including demographic shifts, an uncertain employment environment, low housing affordability and high stocks of unsold homes,” said Lulu Shi, director of Asia-Pacific corporate ratings at Fitch Ratings.
Shi said stabilising the sector would require a broad policy package to support the economy, improvements in labour-market conditions and reduced housing inventory, adding that the process would take time.
Housing demand has remained subdued despite multiple rounds of policy support since the market slid into crisis in 2021, including looser home-purchase restrictions and lower down-payment requirements.
“I think the property market has not yet bottomed out,” said Zichun Huang, China economist at Capital Economics.
“A clear signal that policymakers are willing to devote substantial fiscal resources to reduce the stock of unsold homes would mark a potential turning point,” Huang said. “Absent that, it suggests the government is effectively waiting for supply and demand to come gradually back in line, and that process will take several more years.”
The Reuters poll also showed that property investment and sales are expected to remain weak this year, with investment forecast to fall 10.3% and sales down 6.5%.
Chinese policymakers pledged to stabilise the real estate market, improve housing supply and make better use of existing housing stock, including by buying unsold homes for conversion into government-subsidised housing, according to an official government report released on March 5.
“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,” Shi said.
(Other stories from the Q1 Reuters housing market polls)
(Reporting by Liangping Gao and Ryan Woo; Additional reporting by Shuyan Wang; Editing by Thomas Derpinghaus)
