China is projected to witness a 10–14% decrease in nationwide primary property sales due to an ongoing surplus of completed housing, as per a recent report by S&P Global. The report indicates that the completed primary inventory has been steadily increasing, reaching 766 million square meters by the end of 2025, marking a 1.6% year-on-year rise. This inventory surge is significantly higher, standing at 45% above the 10-year average before the market downturn.
S&P Global’s report highlights a sluggish destocking trend, noting a 4% drop in completed inventory from its peak in February 2025. However, the agency warns that without substantial nationwide interventions to address the oversupply issue, property sales are likely to continue declining. The report also points out that price weaknesses in primary and secondary homes have extended to tier-one cities in the final quarter of 2025.
In contrast to previous expectations, major cities like Beijing, Guangzhou, and Shenzhen witnessed a 3.2–5.6% year-on-year decline in primary home prices in 2025, with only Shanghai experiencing a price increase. Looking ahead, the report forecasts a potential 2-4% drop in primary home prices and a 5–8% decrease in secondary home prices in 2026. The expectation is that local government regulations on pricing could mitigate significant drops in primary home prices.
The National Bureau of Statistics reported that secondary home prices decreased across all 70 mid to large cities in China in 2025. S&P Global cautioned that a further 10% decline in contracted sales could lead to downward rating pressures on four out of every ten Chinese developers, excluding China Vanke. Additionally, the report mentioned that Chinese banks are releasing foreclosed properties in specific regions, with an estimated 700,000 to 1.3 million units available for sale in 2025, potentially adding to the oversupply and further impacting home prices.
