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City buildings in the city of Huian, Jiangsu Province, China, March 18, 2025.
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Beijing – UBS analysts on Wednesday became the most recent, who increases the expectations that the fight in the real estate market in China is close to stabilization.
“After four or five years of cycle, we began to see some relatively positive signals,” said John Lam, head of Asia-Pacific and Big China to research the UBS Investment Bank property, in front of reporters on Wednesday. This is, according to CNBC, its remarks in the mandarin language.
“Of course, these signals are not all over the country and may be local,” Lam said. “But compared to the past, it must be more positive.”
One of the indicators is to improve sales in the largest cities in China.
Existing housing sales in five major Chinese cities rose more than 30% compared to a year before a week to Wednesday, according to an analysis of CNBC data available through wind information. The category is commonly referred to as “secondary home sales” in China, unlike the main market, which usually consists of newly built residential homes.
UBS now predicts that housing prices in China can stabilize in early 2026, earlier than the time frame forecast in mid-2026. They expect secondary transactions to reach half of the total by 2026.
UBS examined four factors – low inventory, growing prices for land prices, increasing secondary sales and rates raising prices – which indicated a flexion point in the real estate market between 2014 and 2015 by February 2025. Only rents prices had not yet improved, the company said.
Chinese politicians in September called for a “Stop” in the decline of the property sectorWhich is the bigger part of the household wealth and only a few years earlier contributed to more than a quarter of the economy. Main developers like Evergrande have by default of their debtWhile real estate sales have almost decreased in half after 2021 to about $ 9.7 trillion ($ 1.34 trillion) last year, according to the S&P Global Ratings.
The Chinese real estate market began its recent decline in late 2020 after Beijing began to break up with the high reading of growth debt developers. Despite the storm of central and local government measures in the last year and a half, the decline in real estate continues.
But since a stronger incentive was announced at the end of last year, analysts began to predict that the bottom could come right after this year.
Back in January S&P Global Ratings repeated its See that the real estate market in China will stabilize by the second half of 2025.S Analysts expected “increasing secondary sales” to be a leading indicator of primary sales.
Then, at the end of February, McKari’s chief Chinese economist Larry Hu pointed to three “positive” signals that could keep the bottom in home prices this year. He noted that in addition to the impetus of policy, the unsold levels of housing inventory have fallen to the lowest since 2011, and a narrowing of the difference between mortgage rates and rental yields can encourage home buyers to buy rather than hire.
But he said in an email this week that what the home market in China needs is the financial support channel through the central bank.
ASIA Real Estate Michelle Kwok HSBC leader in February said there is a “10 characters” that the Chinese real estate market is below. The list included a recovery in new home sales, housing prices and the participation of foreign investment.
In addition to state -owned enterprises, “foreign capital has started investing in the real estate market,” the report said, noting that “two Singapore developers/investment funds have acquired land sites in Shanghai on February 20”.
Foreign investors are also looking for alternative ways to enter the Property Market in China after Beijing Announce impetus for home rental housingS
Invesco at the end of February announced that its real estate investment was set up a joint venture with Zirom, a Chinese company known locally for its standardized, modern apartments.
The joint venture called Izara Holdings plans to initially invest 1.2 billion yuan (about $ 160 million) in residential construction with 1500 rooms near one of the Olympic Olympics sites in Beijing, with a purposeful opening of 2027.
The units are likely to be available for about 5,000 yuan per month, said Calvin Chow, head of the Asia-Pacific region, Invesco Real Estate. He said the financial difficulties of the developers have created a market difference and expects the joint venture to invest in at least another or two projects in China this year.
The Zirom database allows the company to quickly evaluate the regional factors for the selection of new developments, said the CEO of ASTE ASTEMEME YUE in a statement, adding the plans to ultimately expand abroad.
Is not out of the forest
However, the data still reflects the struggling real estate market. Real estate investment has still fallen by nearly 10% in the first two months of the year, according to a number of official economic data published on Monday.
“The property sector is particularly concerned as key data are in the negative territory from all over the country, with the new housing begins growth, which worsens to -29.6% in January -February from -25.5% in the first quarter of 2024,” said Nomura Ting Lou’s chief Chinese economist in a report at at least.
“It has long been our opinion that without the real stabilization of the property sector, there will be no real restoration of the Chinese economy,” he said.
Improved secondary sales also do not take advantage of the developers whose revenue previously came from primary sales. S&P Global Ratings this month put Vanke on Credit Watch and lowered its Longfor rating. Both developers were among the largest on the market.
“Overall, the efforts of China’s policy (the latter) are quite extensive,” Sky Kwah, head of the investment consultant at the Raffles family office, said in an interview earlier this month.
“The key to this point is the implementation. The recovery of the sector relies on consumer confidence,” he said, adding that “you do not trust overnight. The trust must be won.”
