China Home Prices: Slower Fall, Gradual Rise Ahead?

China's housing market is anticipated to experience a slower decline in home prices, with a projected fall of 3.5% for the current year, a revision from earlier forecasts. This adjustment phase is expected to continue, with prices potentially seeing a marginal increase of 0.3% in 2027 and 1.8% in 2028. However, property investment is set for a more significant contraction, estimated at 12.0% this year.

Several cities have implemented buyer incentives, including subsidies, following government directives to curb new projects and reduce inventory. Shenzhen and Guangzhou have rolled out specific measures to support the market. While higher-tier cities may see stabilization in core areas, suburban districts and lower-tier cities could face sustained pressure due to population outflows.

The central policy objective is to prevent a disorderly market slowdown rather than engineer a rapid revival through forceful stimulus. Analysts indicate that authorities retain the capacity to increase support if necessary, but the current priority is stability. Weak household confidence in jobs and incomes continues to temper demand for new homes.