the real estate sector in China 5 news

 As of July 2025, the real estate sector in China is facing significant challenges and shifts, based on recent developments:

• Ongoing Price Declines: Home prices continue to drop, with resale prices falling 0.75% in June 2025 compared to a 0.71% decline in May, and a year-on-year slump of 7.26%, according to the China Index Academy. New home prices also rose at a slower pace (0.19% in June vs. 0.30% in May), signaling persistent market weakness.
• Prolonged Downturn Forecast: Goldman Sachs predicts a potential 10% further decline in home prices by 2027, following a 20% drop since 2021, due to limited policy response and weak demand. This could extend the crisis, with recovery possibly starting in top-tier cities by late 2026.
• Economic Impact: The sector’s struggles, exacerbated by a shrinking population and reduced urbanization, are hitting local governments hard with lost tax revenues from land sales. About 70% of household wealth tied to real estate amplifies the economic ripple effects.
• Policy Efforts: Beijing has introduced measures like mortgage rate cuts and a CNY 8.7 million affordable housing target, but these have had limited impact, especially in lower-tier cities, where demand remains sluggish.
• Market Size and Growth: Despite the crisis, the market was valued at USD 5.30 trillion in 2024 and is projected to reach USD 6.98 trillion by 2030, with a 3.9% CAGR, driven by urbanization and smart city initiatives, though this growth masks underlying instability.

These trends reflect a sector in transition, with opportunities in sustainable and urban projects, but also deep structural challenges.