WHAT IS THE OUTLOOK FOR THE CHINESE PROPERTY MARKET IN 2025?

11.02.2025 Since 2022 the Chinese property market has been in a downturn. As it remains crucial to a recovery in the Chinese economy, I take a look at the outlook for 2025.

The housing market has been a crucial driver of the Chinese economy for the last thirty years. Historically it has contributed around 25 percent of GDP growth and around 70 percent of consumer wealth is invested in housing.

Since 2022 it has been in a downturn as slowing population growth and an excess of speculative development led to a huge glut of unsold homes and falling prices.

So far government efforts to stabilize the market have proved ineffectual. However, the most recent measures that included cuts to mortgage rates, deposit requirements and stamp duty do seem to have had an effect. Indeed, purchase volumes in the secondary market (already built homes as opposed to newly constructed homes) have picked up in recent months. This suggests that the correction in prices over the last three years may have been sufficient to stimulate demand.

Whilst house prices are still falling, if the recent uptick in demand is sustained, then this may be sufficient to stabilize house prices in the second half of the year. This would in turn pave the way for a recovery in Chinese economy in 2026.

For information only. Investors should seek professional advice for their own circumstances before making an investment.

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This post was written by Robin