China’s new property sales are set to drop by 8% in 2025, extending the decline in its real estate market for a fifth year.
Nationwide new home sales in the country will be around RMB8.8 trillion (A$1.9 trillion) this year, S&P Global forecasts. S&P Global had projected in May that sales would fall by 3% this year, but China’s government has introduced fewer measures to encourage demand than expected.
“Homebuyers' confidence remains fragile. As such, we expect the government could roll out further measures to support demand. However, additional supportive measures may only come gradually, and on a city-by-city basis, in our view,” wrote S&P Global.
“In contrast to our previous expectation that China's nationwide property sales may approach stabilisation toward the latter part of 2025, we now believe China's nationwide property sales will continue to moderately decline in 2025 and 2026.”
Primary housing prices will fall by 2.5-3.5% across 2025, S&P Global estimates, and by 1.5-2.5% in 2026.
New property sales were down 8% to RMB5.5 trillion in 2025’s first eight months, per China’s National Bureau of Statistics. Completed unsold inventory rose from 753 million square metres in December to 762 million square metres in August.
Sales volumes in tier-one cities like Beijing and Shanghai rose by 2%. Restrictions on owning multiple properties in Beijing, Shanghai, and Shenzhen were relaxed in mid-August, though the move largely applies to these cities’ outskirts.
China’s five-year loan prime rate has fallen by 10 basis points across 2025 to date, an improvement from a 60 basis point decline in 2024.
Sales in China could also decline by 6-7% in 2026, according to S&P Global. Primary property sales have been dropping since 2021, having reached RMB18.2 trillion that year.
Private businesses are slowing their residential development, while state-owned entities are continuing to amass market share. Private developers are using less than 10% of sales for purchasing land, and state-owned developers are using 55%.
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