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hina's property crisis is deepening, with home prices potentially falling 10% by 2027, according to Goldman Sachs. The market has been struggling since 2021, when Beijing implemented lending curbs to reduce financial risk in the real estate sector. This move triggered a sharp slowdown in China's housing boom and compounded the pain from pandemic restrictions.

    China's economy is facing multiple challenges, including high youth unemployment, deflationary pressures, and weak consumer sentiment. Despite these issues, policymakers have been cautious in rolling out monetary and fiscal support. Goldman Sachs analysts expect the government to ease policy if property prices fall sharply, exports slow, or unemployment rises.

    The analysts' report was based on an analysis of housing bust episodes across 15 economies since 1960, which found that the median housing price correction is 30% over six years. They note that China's property market has fallen 20% over four years and may decline another 10% before bottoming out in 2027.

    The analysts warn that insufficient policy easing could lead to sustained weakness in confidence and private demand, as well as prolonged deflation. However, they also expect top-tier cities to lead the recovery from around late 2026.