China’s property market edges toward an inflection point

BEIJING — UBS analysts on Wednesday became the latest to raise expectations that China’s struggling real estate market is close to stabilizing.

“After four or five years of a downward cycle, we have begun to see some relatively positive signals,” John Lam, head of Asia-Pacific property and Greater China property research at UBS Investment Bank, told reporters Wednesday. That’s according to a CNBC translation of his Mandarin-language remarks.

“Of course these signals aren’t nationwide, and may be local,” Lam said. “But compared to the past, it should be more positive.”

One indicator is improving sales in China’s largest cities.

Existing home sales in five major Chinese cities have climbed by more than 30% from a year ago on a weekly basis as of Wednesday, according to CNBC analysis of data accessed via Wind Information. The category is typically called “secondary home sales” in China, in contrast to the primary market, which has typically consisted of newly built apartment homes.

UBS now predicts China’s home prices can stabilize in early 2026, earlier than the mid-2026 timeframe previously forecast. They expect secondary transactions could reach half of the total by 2026.

UBS looked at four factors — low inventory, a rising premium on land prices, rising secondary sales and increasing rental prices — that had indicated a property market inflection point between 2014 and 2015. As of February 2025, only rental prices had yet to see an improvement, the firm said.

Chinese policymakers in September called for a “halt” in the decline of the property sector, which accounts for the majority of household wealth and just a few years earlier contributed to more than a quarter of the economy. Major developers such as Evergrande have defaulted on their debt, while property sales have nearly halved since 2021 to around 9.7 trillion yuan ($1.34 trillion) last year, according to S&P Global Ratings.

China’s property market began its recent decline in late 2020 after Beijing started cracking down on developers’ high reliance on debt for growth. Despite a flurry of central and local government measures in the last year and a half, the real estate slump has persisted.

But after more forceful stimulus was announced late last year, analysts started to predict a bottom could come as soon as later this year.

Back in January, S&P Global Ratings reiterated its view that China’s real estate market would stabilize toward the second half of 2025. The analysts expected “surging secondary sales” were a leading indicator on primary sales.

Then, in late February, Macquarie’s Chief China Economist Larry Hu pointed to three “positive” signals that could support a bottom in home prices this year. He noted that in addition to the policy push, unsold housing inventory levels have fallen to the lowest since 2011 and a narrowing gap between mortgage rates and rental yields…