China’s property market is expected to stabilize in 2025

China’s struggling real estate sector may not start turning around until the second half of next year — even with the latest stimulus measures, three research firms predicted this month.

After months of incremental measures, Chinese President Xi Jinping in late September led a top-level meeting that vowed to “halt the real estate market decline.” Earlier this month, the Finance Ministry introduced more measures aimed at stabilizing the real estate sector.

“We are finally at an inflection point of the ongoing downward spiral in the housing market on the back of a comprehensive and coordinated easing package,” Goldman Sachs analysts said in an Oct. 22 note titled “China real estate 2025 outlook: Bottoming in sight.”

“This time is different from the previous piecemeal easing measures,” the report said.

The analysts expect property prices in China to stabilize in late 2025, and rise by an average of 2% two years later. Property sales and new home construction are unlikely to stabilize until 2027, Goldman forecast.

S&P Global Ratings and Morgan Stanley this month also published reports forecasting China’s real estate market will bottom in the second half of 2025.

“If the government continues to prioritize support for developer financing and destocking, we believe property sales and prices could stabilize toward the second half of 2025,” Edward Chan, director at S&P Global Ratings, and his team said in an Oct. 17 note. They cautioned it would take time for policies to take effect.

Beijing has made clear that efforts to support the struggling real estate sector come second to its aim of bolstering advanced manufacturing as a new driver of growth. But it’s no easy feat, as property once accounted for more than a quarter of gross domestic product, with ties to both household wealth and local government finances. China’s indebted developers have increasingly struggled to deliver pre-sold homes, dampening consumer sentiment.

Analysts are closely watching a parliamentary meeting next week for any details on fiscal spending on reducing housing inventory.

Goldman’s prediction assumes an additional 8 trillion yuan ($1.12 trillion) in fiscal spending from the government, which has yet to be announced.

“Without such stimulus, the property market downturn could be prolonged by another three years,” the Goldman analysts cautioned. They said such support would need to address developers’ liquidity issues, reduce unsold housing inventories and ensure delivery of the pre-sold but unfinished homes.

Houses in China have typically been sold ahead of completion. That business model proved unsustainable after Beijing cracked down on developers’ high reliance on debt for growth, and homebuyer demand fell with slower economic growth.

Nomura estimated late last year that about 20 million pre-sold homes remained unfinished. Last…