China’s property slump is far from bottoming out. But Beijing is prioritizing technology growth
A new residential complex is under construction in Hangzhou, Zhejiang Province, China on October 20, 2025.
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BEIJING – Chinese policymakers are unlikely to bail out the country’s struggling real estate sector, analysts told CNBC, even as the housing slump affects economic growth.
China’s top leaders, called the Central Committee, are to be evaluated Finish the four-day meeting on Thursdaywhich will outline the priorities for the next five years.
From Beijing’s perspective, the property sector’s pressure on growth has eased, while technological development is a more urgent priority in the current geopolitical landscape, said Ning Xu, author of “China’s Guaranteed Bubble.” For him, this means Beijing is unlikely to implement significantly stronger real estate support.
Over the years, concerns about debt to property developers have led to concerns The crackdown on BeijingChinese state media said earlier this month that “Key sector risks have been effectively hedged and reduced,” according to a translation by CNBC. The piece was part of a series of articles highlighting Beijing’s performance over the past five years and efforts to promote Beijing. Opportunities in technology.
This underscores a further divergence between Beijing’s view and that of most analysts.
“The government believes the property market is bottoming out,” Zhu said. “I believe it’s a gradual process and it may take some time before we get to the bottom.”
Recent data underscores the gap between Beijing’s optimism and market reality. of China Bureau of Statistics on Monday Compared to the same period in 2024, high-tech output increased by 9.6% in the first three quarters of the year, while total industrial output increased by 6.2%.
However, real estate investment fell 13.9% in the first three quarters, extending the sector’s decline through September. The decline hit fixed-asset investment negative region – The only such decline on record except for the Covid-19 (pandemic) pandemic.
This means that in one year Beijing “Stopping” the decline in the property sector.There are still some signs of change.
It’s hard to predict when real estate will bottom out, said Lulu Xi, director of Fitch Ratings. “Total population, population and employment conditions and housing market inventory, they’re all deteriorating.”
China’s falling birth rate points to Weak housing demand In the future, uncertainty about jobs and income growth weighs On the sentiments of home buyers in the near term.
House prices fell
The decline in property prices over the last two years or so is also affecting homebuyer sentiment, which once fueled huge speculation in the property market.
The weighted average of new home prices in September fell 2.7% from the previous month on an annual basis, according to a Goldman Sachs analysis of official data from China’s 70 major cities published on Monday. That was higher than the 2.1% decline seen in August.
Prices of “secondary” homes, those that have already sold once, have fallen 5% to 20% over the past year, Goldman said, citing a mix of official and third-party data.
Looking ahead, Beijing is unlikely to overemphasize property policy, whether it’s additional support or discouraging real estate speculation, said Bruce Pang, adjunct associate professor at CUHK Business School.
He noted that China’s multi-year plans, such as those for the next five years, focus on new approaches to growth.
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Ease measures introduced in August, such as relaxed restrictions on multiple property purchases in major cities, did little to lift sentiment. The policy changes are mostly implemented in the outskirts of the city rather than the most attractive downtown areas.
Citing weaker-than-expected policy support, S&P Global Ratings earlier this month forecast asset sales to fall 8% this year. Worse than previously predicted. They expect a further decline of at least 6% next year as a market bottom remains elusive.
Moody’s Ratings predicts a single-digit decline in China’s home sales over the next 12 to 18 months.
The forecast is based on falling demand from buyers who expect policy easing, said Daniel Zhou, assistant vice president and analyst at Moody’s Ratings. The property market should gradually stabilize in the long term under the existing policy measures, he said.
Broad economic impact
The decline in real estate is having a major impact on China’s economy, even though the sector’s role has shrunk to less than a quarter of output. As property sales are estimated It was halved in just a few yearsManufacturing and exports have helped moderate the decline.
“China’s economy remains in 2-speed mode, with consumption/assets as the weak track and exports/production as the strong track,” Larry Hu, chief China economist at Macquarie, said in a note. “Until policymakers can rely on external demand to fuel growth, the pattern will continue.”
Chinese exports have been unexpectedly strong this year 8.3% growth in September Despite a 27% drop in shipments to the US from a year ago
For real estate, “it’s very difficult to see a growth trend,” Xi said. “We believe there will be more policies, but it is unlikely that one policy will change the whole situation.”
Eventually, she expects more buyers to slowly return to the housing market once home prices fall.
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