{"id":192745,"date":"2025-11-21T15:18:10","date_gmt":"2025-11-21T15:18:10","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/192745\/"},"modified":"2025-11-21T15:18:10","modified_gmt":"2025-11-21T15:18:10","slug":"chinas-real-estate-market-faces-more-issues-amid-falling-housing-prices","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/192745\/","title":{"rendered":"China\u2019s real estate market faces more issues amid falling housing prices"},"content":{"rendered":"

ISTANBUL<\/strong><\/p>\n

Housing prices are falling in China, and its real estate market is facing a slowdown in investments, deepening concerns.<\/p>\n

New and previously owned housing prices fell in many of the 70 large and medium-sized in the country, specifically in Beijing, Shanghai, Guangzhou, and Shenzhen by 0.8%, in some 31 large second-tier cities 2%, and some 35 medium-sized cities 3.4%, according to the country\u2019s National Bureau of Statistics.<\/p>\n

Shanghai, the country\u2019s most populous city, saw housing prices rise 5.7% on an annual basis, becoming the exception among first-tier cities, while previously owned housing prices fell 4.4% year-on-year in first-tier cities, 5.2% in second-tier, and 5.7% in third-tier cities.<\/p>\n

The central government lowered credit interest rates and minimum down payments recently to stimulate the housing market, while local governments implemented policy measures to encourage home sales, but these decisions have yet to influence the overall trend.<\/p>\n

The slowdown in China\u2019s real estate sector is affecting the cement and steel sectors. The housing market is much more critical in China than in other countries \u2014 the country\u2019s economic model, social structure, and even political stability strongly depend on the housing sector.<\/p>\n

The housing market plays a key role in the global economy, as it drives a significant portion of growth of many countries, while contributing to the construction sector, real estate investments, and mortgage loans.<\/p>\n

Housing loans are one of the largest portfolio items in the banking system, and a potential bubble or crash in the housing market can cause serious fluctuations in the financial sector.<\/p>\n

Excessive expansion post-2008 financial crisis causes problems<\/strong><\/p>\n

Said Kaymaz, an Asian markets analyst, told Anadolu that the modern Chinese housing market was formed in the 1990s and the market in cities grew rapidly in parallel with economic growth.<\/p>\n

He noted that the Chinese government began massive fiscal and monetary expansion in 2008 after the global financial crisis, which affected the current administration\u2019s view of the housing market today.<\/p>\n

\u201cHousing construction firms launched new projects to compete against each other due to the vitality in the market, as the prices were up \u2014 they recklessly borrowed and used large amounts of leverage while doing so, however,\u201d he said.<\/p>\n

Kaymaz said Chinese President Xi Jinping\u2019s decision to take measures against speculation in the housing market in 2016 was the tipping point for the decline in the sector.<\/p>\n

\u201cFormer vice premier and economist Liu He launched the deleveraging campaign in the sector, and these measures led to the cooling of the market, resulting in new issues, such as the Evergrande crisis,\u201d he noted. \u201cReal estate companies faced countless restrictions on new projects and financing initiatives.\u201d<\/p>\n

Kaymaz emphasized that the many measures introduced against speculative house purchases played a key role, as those wanting to buy a second or more homes weren\u2019t allowed to access credit. Some cities like Beijing implemented measures so strict that it led to a significant decline in home purchases.<\/p>\n

He mentioned that the Chinese real estate sector, alongside its indirect influence, made up nearly 30% of the country\u2019s gross domestic product (GDP) in 2015.<\/p>\n

\u201cThe government decided to allocate resources from the construction sector to sectors like electric vehicles (EVs), renewable energy, and semiconductors with its long-term plan in 2015,\u201d he said. \u201cFinancial support wasn\u2019t provided to real estate companies that were struggling, so long as they didn\u2019t pose a systemic risk, but the slowdown in the economic activity due to real estate issues translated to the economy\u2019s growth rate.\u201d<\/p>\n

\u201cThe (2021) Evergrande crisis especially accelerated the decline in housing prices, while the extremely strict measures and uncertainties during the pandemic prompted buyers to be more cautious; at the same time, Beijing\u2019s insistence on not loosening credit conditions pushed prices down via liquidity \u2014 structural factors like the halt of the rural-urban migration, rising youth unemployment, and the slowdown in real income growth at the same time drove housing prices,\u201d he added.<\/p>\n

Housing sector remains not the priority<\/strong><\/p>\n

Kaymaz said policymakers view the real estate sector as an inefficient economic layer, not prioritizing it in resource allocation, but he argued that the sector\u2019s \u201csystemic importance\u201d continues.<\/p>\n

\u201cThe Communist Party of China\u2019s leadership is taking measures to stabilize housing prices but these measures have yet to yield results, and they generally focus on stabilizing the market and cleaning up the balance sheets of indebted firms,\u201d he said.<\/p>\n

Kaymaz noted that the decline in housing prices accelerated in recent months, and that the market has been weak due to the economic downturn and weak household confidence.<\/p>\n

\u201cThe sector\u2019s share in influencing the Chinese economy, coupled with indirect sectors, fell to around 15%, while the share of high-value-added sectors like chips and EVs grew steadily and continuously over the past decade,\u201d he noted. \u201cA structural transformation is happening, but it is causing pain \u2014 we expect the decline in housing prices and the problems the sector faces to continue for at least a few more years.\u201d<\/p>\n

\u201cThe current administration is reluctant to provide financial support to the sector or to engage in monetary expansion to support it, but some academics say the stabilization of the housing market is fundamental to stimulate domestic consumption, calling for stronger support for the housing market,\u201d he added.<\/p>\n


\n
\n Anadolu Agency website contains only a portion of the news stories offered to subscribers in the AA News Broadcasting System (HAS), and in summarized form. Please contact us for subscription options.<\/b>
\n <\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"ISTANBUL Housing prices are falling in China, and its real estate market is facing a slowdown in investments,…\n","protected":false},"author":2,"featured_media":192746,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[11900,79,381,179,18,3847,21070,19,17,1361],"class_list":{"0":"post-192745","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-anadolu-ajansi","9":"tag-business","10":"tag-china","11":"tag-economy","12":"tag-eire","13":"tag-housing","14":"tag-housing-sector","15":"tag-ie","16":"tag-ireland","17":"tag-real-estate"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115588360874270942","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/192745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=192745"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/192745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/192746"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=192745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=192745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=192745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}