Key facts
- China's home prices are expected to fall 3.4% in 2026, a marginal improvement from the previous forecast.
- Property investment is projected to shrink 20% this year, a deeper decline than previously anticipated.
- Sales by floor area are forecast to drop 10%, compared with an 8.3% fall predicted previously.
- The property crisis, which began in 2021, continues to impact the broader Chinese economy.
- Policy is focused on clearing excess housing stock and reducing new residential projects.
China's home prices are anticipated to decline slightly less this year than previously forecast, while property investment and sales are expected to see deeper slumps, according to a Reuters poll of 11 institutions. Home prices are projected to fall 3.4% in 2026, a marginal improvement from the 3.5% drop predicted in May. Prices are forecast to decline 0.3% in 2027, reversing a previous forecast of a 0.3% rise.
Property investment is expected to shrink by 20% this year, a more significant decline than the 12% drop predicted in the May poll. Sales by floor area are forecast to fall 10%, compared with the 8.3% decrease previously anticipated. These figures highlight the ongoing crisis in China's property sector, which began in 2021 following regulatory crackdowns that triggered liquidity issues among developers.
Experts suggest that while policy efforts are underway to clear excess housing stock and reduce new projects, a broad-based turnaround will take time. Price divergence persists, with top-tier cities showing some cyclical improvement, while lower-tier cities continue to search for a bottom. The fallout from the property crisis, exemplified by the sentencing of China Evergrande founder Hui Ka Yan, continues to impact the broader economy.