Economists in a recent Reuters poll have adjusted their forecasts for China’s new home prices, projecting a slower rate of decline for 2024 than previously anticipated. The revision follows a series of new support measures announced by the Chinese government aimed at stabilizing the country’s property sector.
The survey, conducted from May 10-20 among 11 economists, produced a median forecast that new home prices will fall by 5.0% in 2024. This marks a moderation from a 5.7% decline projected in a similar poll conducted in March. The economists also forecast that the price decline would continue to slow, with a projected 1.0% fall in 2025.
These figures come after Chinese authorities introduced what they described as “historic” steps to address the prolonged downturn in the property market. In mid-May, the People’s Bank of China announced several policy changes, including the removal of the nationwide minimum mortgage interest rate floor for first and second homes and a reduction in the minimum down payment ratio for first-time buyers to 15%.
Additionally, the central bank established a 300 billion yuan ($41.5 billion) relending program to support local state-owned enterprises in purchasing completed but unsold apartments from developers. These homes are intended to be converted into affordable housing.
Data from China’s National Bureau of Statistics (NBS) provides context for the market environment. Official figures showed that new home prices in April fell for the 10th consecutive month, marking a 0.6% drop from the previous month and the steepest decline since November 2014. The property sector, once a primary driver of economic growth, has faced challenges including developer debt issues and decreased buyer confidence.
The Reuters poll indicates that the economists surveyed expect the market to find a floor in the coming years. Their median forecast shows home prices are expected to rise by 1.0% in the first half of 2027.
The performance of China’s property market remains a focus for both domestic and international observers due to its significant role in the nation’s economy. The government’s recent interventions represent its latest attempt to manage the sector’s adjustment.
