S&P Global Ratings analysts have indicated that the long-standing slump in China's property market could be nearing an end, with residential real estate prices expected to stabilize by the third quarter of 2028.
This marks a significant shift from earlier assessments, as the report highlights recent government interventions, including restrictions on developers selling unfinished properties and a mortgage rate subsidy for first-time homebuyers. These measures are anticipated to reduce supply in the oversaturated market, which has seen a 22% decline in prices since their peak in 2021.
Analysts note that the scale of unfinished homes remains a critical issue, with estimates suggesting that the number of such homes is about 20 times the size of Country Garden, a major developer. Comparisons to past housing crises in Japan, the U.S., and Spain suggest that China's approach to reducing supply and corporate debt may lead to a more rapid stabilization.
Additionally, reports from Guotai Junan International indicate that tier-one cities like Shanghai and Beijing are beginning to show signs of price stabilization, with existing home prices in Shanghai rising by 1.4% from earlier lows. However, analysts caution that while the mortgage subsidy may boost short-term sales, it may not lead to sustained demand in the long run