China's Property Investment Declines 10.3% Year-on-Year in April 2025
Despite policy interventions, China's real estate sector continues to struggle, with new home prices unchanged for the second consecutive month and no growth since May 2023.
Real EstateProperty InvestmentChinaEconomic UncertaintyPolicy InterventionsReal Estate NewsMay 19, 2025
The property sector remains on a downward path, with many experts believing that the bottom is near, though the exact distance remains uncertain. According to Zhaopeng Xing, a senior China strategist at ANZ, the sector is facing significant challenges. From a year earlier, prices in April were down 4.0%, a slight improvement from the 4.5% decline in the previous month, as calculated by Reuters based on data from China's National Bureau of Statistics.
Beijing has introduced a series of stimulus measures in recent weeks to bolster the economy amid ongoing trade uncertainties with the U.S. These measures include reducing mortgage costs for some buyers to help turn around the property crisis that began in 2021. However, indebted developers have struggled to repay their borrowings and deliver pre-sold homes, further dampening confidence in the sector.
The April slowdown reflects the diminishing effects of policy stimulus, the ongoing impact of U.S.-China trade tensions, and a seasonal demand contraction following March's traditional peak, according to Zhang Dawei, chief analyst at property agency Centaline. He noted that policy interventions have not fundamentally altered homebuyers' long-term market perspective, and persistent economic uncertainty and income instability continue to make potential buyers increasingly cautious.
Resale home prices have also declined across tier-one, tier-two, and tier-three cities on both a monthly and annual basis. Separate official data showed that property investment dropped 10.3% year-on-year, and sales by floor area shrank 2.8% in the January-April period. The head of China's financial regulator has promised to roll out additional measures to help sustain the 'stabilising trend of the property sector' at a high-profile press conference earlier this month.
The central bank has also cut the interest rate for housing provident fund loans by 25 basis points, effective May 8, reducing borrowing costs for some buyers. This policy response clearly demonstrates the government's resolve to support the real estate sector. Market participants are now awaiting stronger measures to restore confidence and avert further decline, according to Centaline's Zhang.
In summary, while the government continues to implement various measures to stabilize the real estate market, the sector remains under pressure due to economic uncertainty and ongoing trade tensions. The next few months will be crucial in determining whether these efforts will be sufficient to turn around the current downturn.
Frequently Asked Questions
What is the current trend in China's new home prices?
New home prices in China have remained unchanged for the second consecutive month and have shown no growth since May 2023.
What factors are contributing to the slowdown in China's property market?
The slowdown is attributed to diminishing policy stimulus effects, ongoing U.S.-China trade tensions, and seasonal demand contraction following March's traditional peak.
What measures has the Chinese government taken to stabilize the property market?
The government has introduced a series of stimulus measures, including reducing mortgage costs for some buyers and cutting the interest rate for housing provident fund loans by 25 basis points.
How have resale home prices been affected?
Resale home prices have declined across tier-one, tier-two, and tier-three cities on both a monthly and annual basis.
What is the government's future plan for the property sector?
The head of China's financial regulator has promised to roll out additional measures to help sustain the 'stabilising trend of the property sector.'
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