BEIJING – China’s property sector is showing positive changes and market confidence is improving, its housing minister said on March 9, as policymakers try to set a more optimistic tone for the economy in 2025 in the face of mounting US trade pressure.
The comments come after several tough years for the once high-flying real estate sector, with property investment slumping the most on record in 2024 and property sales and new construction falling at a double-digit pace, weighing heavily on economic growth.
At a press conference on the sidelines of an annual Parliament meeting in Beijing, Minister of Housing and Urban-Rural Development Ni Hong said that since January and February, the real estate market has “maintained a positive trend of stopping declines and returning to stabilisation”.
China will not release early 2025 figures for housing sales and starts until March 17, but analysts at Nomura said in a recent note that sales and prices for early 2025 are holding up better than expected in China’s biggest cities.
Still, analysts polled by Reuters in February expect home prices to drop further in 2025 and do not expect a market recovery until 2026.
Some analysts estimate that average home prices have slumped by 20 per cent to 30 per cent since a peak in August 2021.
This sparked severe cash crunches and led to incomplete projects, developer debt defaults and even public protests by home buyers, hammering market sentiment.
Signs of stabilisation or even a mild rebound in the property market could help cushion China’s economy from the impact of mounting US trade tariffs on Chinese goods.
With 70 per cent of household wealth held in real estate, which at its peak accounted for about a quarter of the economy, consumers have kept their wallets shut tight amid growing economic uncertainty.
Official data showed on March 9 that deflationary pressures deepened in February, as households remained cautious about spending amid job and income worries.
China will step up lending for so-called “whitelist” projects to help qualified developers with more financial support, and expand the scale of urban village renovations, said Mr Ni, adding that a million units were renovated in 2024.
The government’s 2025 work report released on March 5 by Premier Li Qiang said that sustained efforts are needed to stabilise the real estate market and prevent further declines.
Mr Li also pledged to push forward the construction of safe, green and intelligent “good houses”. REUTERS
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