China’s property market may be nearing a turning point, but a broad recovery is not yet evident: S&P Global Ratings says residential prices could bottom in the third quarter of 2028, while the largest cities may recover as soon as next year. The forecast offers a possible timeline after years of falling prices. Yet declines in sales, investment and construction starts show why it is too early to call the downturn over.
A forecast, not a confirmed bottom
S&P Global Ratings analysts said in a report distributed Thursday that the prolonged slump may be approaching an end. Their forecast places a potential nationwide bottom for residential prices in Q3 2028; it does not establish that prices have already stopped falling or that a recovery is assured.
The distinction matters for buyers, developers and lenders making decisions over different time horizons. A possible price floor nearly two years away offers little certainty for households choosing whether to buy now, while developers still face weak demand and the challenge of selling existing homes. The outlook is a sign to watch, not evidence of a completed turnaround.
Large cities could lead
S&P’s report says prices in China’s largest cities could recover as soon as next year, ahead of the broader market’s projected bottom. Goldman Sachs Research also points to major, prosperous cities as places where demand may find support first, making urban differences central to the recovery question.
A rebound in those markets could help improve confidence among buyers and other market participants, but it would not mean smaller cities had turned around too. The Times of India describes a mixed picture, with tier-one cities performing better than smaller markets. That divide makes a national average an incomplete guide to conditions in any particular city.
Price declines remain severe
Recent price data underline how much ground the market would need to regain. Merics says Chinese property prices had been declining for nearly six years and that new-home prices fell 6.1% in September. It identifies that contraction as the second largest on record, behind the 6.4% fall recorded in April 2015.
The September figure is a measure of continuing weakness, not proof that the bottom is near. Even if the pace or distribution of declines changes, sustained falling prices can weigh on buyer confidence and make it harder for developers to plan new projects. The distance between that evidence and S&P’s 2028 forecast is why the prospect of a turn should be treated cautiously.
Support measures face a tough test
Goldman Sachs Research suggests that recent aggressive government measures to stabilise housing may mark a turning point. The Times of India, however, reports that new support has not yet produced a broad rebound: property sales, real-estate investment and new construction starts all declined sharply during the first eight months of the year.
Those indicators track different parts of the market. Sales reflect buyers’ willingness to commit, investment captures developers’ spending, and construction starts signal whether firms are beginning new work. Their simultaneous decline points to a recovery challenge beyond prices alone. Support measures will need to be followed by stronger activity before the market can be described as broadly recovered.
What would confirm a change
The most useful signs to monitor are whether home prices stabilise in the largest cities, whether sales improve, and whether developers resume investment and new construction. S&P’s forecast gives a possible longer-term marker—Q3 2028—while its near-term expectation for the largest cities makes those markets an earlier test.
For now, the evidence points in two directions: forecasts and policy measures suggest a possible path towards stabilisation, while September’s 6.1% fall in new-home prices and weak activity through the first eight months show that the slump remains entrenched. A lasting turn would require improvement across both city tiers and the wider measures of market activity, not a hopeful forecast alone.
Takeaway: China’s housing downturn may be approaching a turning point, but the price forecast is conditional and current sales, investment and construction figures still show broad weakness.
References
- cnbc.com — “China's real estate market may be set for a turnaround, S&P says”
- chinabeigebook.com — “Live Forecast Tracker – China Beige Book”
- Goldman Sachs — “Has China’s property market reached the bottom?”
- timesofindia.indiatimes.com — “China Home Prices: Why China’s housing market remains weak despite new government support measures – The Times of India”
- Merics — “China’s economy shows faint signs of stabilization over Q3”
