Optimism in China's property market as prices look to stabilise

Early signs of rebound in some big cities may not lead to broad recovery, analysts caution

- Michelle Ng

BEIJING - Back in mid-2024, instead of selling her 180 sq m home in Beijing at a loss of 100,000 yuan (S$18,400), communication manager Emily Wang decided to rent it out.

"At that time, the resale housing market was declining month by month, and the price that the unit could fetch was lower than expected and kept dropping, so I thought it was not worthwhile to sell," she told The Sunday Times.

Instead, the 34-year-old collects 11,000 yuan monthly for renting out the unit. She has bought another apartment to live in.

These days, Ms Wang thinks her patience might be paying off, as the value of the unit she rented out is no longer tumbling. Her next hope is that prices will start picking up.

In large cities like Beijing, the price decline in China's resale housing market has slowed, and new home prices have picked up in recent months. This has sparked optimism among Chinese officials and some analysts that China's beleaguered property sector may be on the path to recovery.

But given China's vast and fragmented real estate market, other analysts caution that early signs of a rebound in some big cities may not translate into a broad recovery. Even as the market shows short-term improvements, there remain structural challenges, such as China's shrinking population, that could hinder a full recovery.

China has been grappling with a property slump, which is now in its fifth year. In 2021, a regulatory crackdown on high leverage among property developers led to a housing market crash, leaving a trail of uncompleted homes after some developers defaulted on their debts.