China’s real estate sector remains under sustained pressure as declining prices, excess inventory and subdued buyer sentiment continue to weigh on one of the country’s most important economic pillars. Despite a series of support measures introduced over the past year, confidence has yet to recover, and the market is still searching for a clear bottom. Developers and homeowners alike face prolonged uncertainty as both new-build and resale activity remain well below previous cycles.
Property prices have continued to slip across major and smaller cities, reflecting a broad imbalance between supply and demand. Years of aggressive land acquisition and rapid construction have left developers with large volumes of unsold housing, even as new projects have slowed sharply. Households, once accustomed to rising real estate values, are now more cautious, delaying purchases in anticipation of further declines. This shift in expectations has weakened one of the sector’s traditional stabilising forces: the belief that property will reliably appreciate over time.
The downturn has been compounded by a lengthy developer-debt crisis that eroded trust across the market. High-profile defaults and stalled projects have made buyers more reluctant to commit to off-plan purchases, reducing a key source of liquidity for developers already facing tighter financial conditions. The pressure on balance sheets has forced many firms to scale back construction, cut prices or retreat from land acquisitions, reinforcing a cycle of weakening activity.
Authorities have sought to revive momentum by easing mortgage rules, lowering borrowing costs and extending support to certain developers. However, these measures have had limited impact so far, largely because the core challenges are structural rather than temporary. Oversupply in many regions continues to suppress price growth, while demographic trends point to a slower pace of household formation than during the boom years.
For the broader economy, the fragility of the property sector remains a significant concern. Real estate has long played a central role in investment, household wealth and local government revenue. Prolonged weakness risks dragging on consumer confidence and slowing related industries, from construction materials to home furnishings.
