S&P Global Ratings expects China’s real estate market downturn to worsen in 2026, with primary home sales projected to decline by between 10% and 14%, a drop larger than previously anticipated. This is attributed to excess supply, weak demand, and slowing buyer confidence, in addition to strict government policies that have limited developers’ reliance on debt.
The agency also expects prices to continue falling by 2% to 4%, particularly as the pace of decline accelerates in major cities such as Beijing, Guangzhou, and Shenzhen, while Shanghai has been the only exception with rising prices.
Annual sales have halved over four years as unsold inventory continues to accumulate, increasing financial pressure on developers and threatening credit rating downgrades for many of them if the deterioration persists.
