China’s real estate market borders a turning point

Beijing – UBS analysts became Wednesday in the last to increase the expectations that China’s 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 the property of Asia-Pacific and Greater China Property Research at UBS Investment Bank told journalists. That is according to a translation of CNBC of your comments in Mandarin.

“Of course, these signs are not throughout the country, and they can be local,” Lam said. “But compared to the past, it should be more positive.”

An indicator is to improve sales in the largest cities in China.

The sales of existing housing in five important Chinese cities have increased by more than 30% for a year weekly as of Wednesday, according to the CNBC analysis of the data accessed through wind information. The category is generally called “secondary sales of housing” in China, in contrast to the primary market, which has generally consisted of newly built apartment houses.

UBS now predicts that China’s housing prices can stabilize in early 2026, before the prognosis of the mid -2026 period. They expect secondary transactions to reach half of the total by 2026.

UBS analyzed four factors: under inventory, a growing premium in land prices, the increase in secondary sales and the increase in rental prices, which had indicated a inflection point of the real estate market between 2014 and 2015. As of February 2025, only rental prices had not yet seen an improvement, the company said.

Chinese policy formulators in September asked for a “Stop” in the decrease in the property sectorwhich represents most domestic wealth and only a few years before contributed to more than a quarter of the economy. Main developers such as Evergrande have breached in your debtWhile property sales have almost been reduced by half from 2021 to around 9.7 billion yuan ($ 1.34 billion) last year, according to S&P Global Ratings.

China’s real estate market began its recent decrease at the end of 2020 after Beijing began taking energetic measures against the high dependence of debt developers for growth. Despite a wave of central and local government measures in the last year and a half, the fall of real estate has persisted.

But after a more forceful stimulus was announced at the end of last year, analysts began to predict that a fund could come as soon as later this year.

In January, S&P Global Ratings reiterated its See that China’s real estate market would stabilize towards the second half of 2025. Analysts expected the “increasing secondary sales” to be a main indicator in primary sales.

Then, at the end of February, Macquarie’s main economist from China, Larry Hu, said three “positive” signals that could support a background in housing prices this year. He pointed out that, in addition to the impulse of politics, the levels of inventory of unprecedented housing have fallen to the lowest since 2011 and a narrow gap between mortgage rates and rental yields could encourage housing buyers to buy instead of renting.

But he said in an email this week that what China’s real estate market still needs is the financial support channeled through the Central Bank.

The HSBC Roots Chief of Asia, Michelle Kwok, in February said there are “10 signs” that the Chinese real estate market has touched background. The list included the recovery in sales of new housing, housing prices and participation in foreign investment.

In addition to state companies, “Foreign capital has begun to invest in the real estate market,” said the report, pointing out “two Singapurenan investment developers/funds acquired land sites in Shanghai on February 20”.

Foreign investors are also looking for alternative ways to enter China’s real estate market after Beijing announced an impulse for affordable rental housing.

Invesco at the end of February announced that its real estate investment arm formed a joint company with Ziroom, a Chinese company locally known for its standardized modern -style apartment rentals.

The joint company, called Izara Holdings, plans to initiate 1.2 billion yuan (around $ 160 million) in a rental housing of 1,500 rooms near one of the sites for Beijing Winter Olympic Games, with a 2027 directed opening.

It is likely that the units are available to rent around 5,000 yuan per month, said Calvin Chou, head of Asia-Pacific, Invesco Real Estate, in an interview. He said that the financial difficulties of developers have created a market gap, and expects the joint company to invest in at least one or two more projects in China this year.

The Ziroom database allows the company to quickly evaluate the regional factors to choose new developments, said the CEO of Ziroom Asset Management, Meng Yue, in a statement, adding the risk plans to finally expand abroad.