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onstruction underway in Huai'an, Jiangsu, China, on 9 Oct 2025. S&P Global Ratings warns that the 2025 real‑estate slump will deepen, extending a five‑year downturn and delaying any recovery. New‑home sales are forecast to fall 8 % from 2024, reaching 8.8–9 trillion yuan ($1.23–1.26 trn), a sharper decline than the 3 % cut predicted in May. Analysts cite fragile buyer sentiment; Beijing must keep backing the sector to rebuild confidence.

    In September 2024, Beijing pledged to stop the decline, but recent measures have stalled momentum. The five‑year loan prime rate has slipped only 10 bp this year versus 60 bp in 2024, signalling a less aggressive easing stance. August saw the three largest cities relax purchase limits for multiple‑property ownership, mainly in peripheral zones. Stabilising demand in first‑tier cities could make recovery more sustainable.

    A bottom remains elusive. Sales are projected below 9 trillion yuan this year, halving the market from 18.2 trillion yuan in 2021. S&P expects another 6–7 % drop in 2026, with primary prices down 1.5–2.5 %. Earlier, buyers pre‑purchased units before completion; construction delays eroded confidence, prompting a whitelist for approved unfinished projects. Unsold inventory rose to 762 million m² in August from 753 million m² in December 2024.

    The government assures that apartment delivery is secure, but overall demand is weaker than expected. Incremental support is likely as the market weakens. August’s easing of restrictions and Premier Li Qiang’s admission of an unresolved slump underline the need for further aid. In September, sales by China’s top 100 developers grew 0.4 % YoY. The report concludes that while the market may shrink, a more resilient sector could emerge.