China's Real Estate Market May Be Nearing a Recovery
S&P Global Ratings has revised its outlook on China’s real estate market, suggesting that prices may hit their lowest point in the third quarter of 2028 and begin to recover as early as next year. This shift comes after two key policy measures introduced by Beijing aimed at stabilizing the sector: new restrictions on developers selling unfinished properties and a mortgage rate subsidy for first-time buyers. The report highlights that China is reducing supply more aggressively than Japan did during its 1990s housing crisis, which could help stabilize prices. Additionally, corporate deleveraging efforts are underway as developers become cautious about land purchases to avoid overbuilding. Guotai Junan International also predicts a potential recovery in tier-one cities like Beijing and Shanghai by the end of this year. The market has already seen residential price declines of 22% since their peak in 2021, but analysts believe continued supply reduction will be key to long-term stabilization. The AI-driven economic rebound is also contributing positively to property demand.
Topics: China real estate market government policy impact S&P Global Ratings