China Home Prices To Decline

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China Home Prices To Decline

China Home Prices To Stay Under Pressure Until 2026

recent poll shows that China's property sector will stay under pressure till the year 2026. The outlook remains gloomy even though the government is making efforts to stabilize house prices.

The growth in house prices will only resume in 2026. However, the pace of the growth will be much slower. This comes at a time when the government is trying its best to stop the decline in house prices.

Housing Sector Faces Multiple Headwinds

What's causing the issues in China's property market? Experts believe it has to do with bearish demand, high inventory, and the population decline.

If we look back, the housing sector accounted for 25% of the Chinese economy during 2021. However, that's a thing of the past now with no end in sight for this year as well.

The poll has also revealed a decline in property sales, and investment in the sector is also down. There's no doubt that the housing market is facing multiple headwinds.

Even the government understands the gravity of the situation. That's why the government urged the local governments in China to buy unsold homes.

But, even this didn't offer any respite to the already struggling property sector. Now, experts believe that the government should go ahead with large-scale buying of empty apartments.

There is no way out of this mess unless the government solves the structural challenges. Including employment uncertainty, unsold housing inventory, and little to no housing affordability.

According to analysts, the home prices will decline by 2.5% this year. This will be a lot lower than the earlier forecast of 2.0%.

The overall situation is very bleak for China's property sector, and the only way out is a mass-scale government bailout. However, large-scale buying of empty apartments will also cost the government a lot of money! And this will set a wrong notion for the property and other sectors in the future.

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