China’s housing market continued its downward slide in February 2025, marking the 21st consecutive month of declining home prices. Data from 70 major cities showed a 0.1% drop from the previous month, with prices down 4.8% compared to the same period last year. Despite ongoing government efforts to stabilize the sector, the real estate slump persists, raising concerns about broader economic implications.
The prolonged downturn is driven by structural issues, including an aging population, slowing wage growth, and an oversupply of unsold properties. The crisis, which began in 2021, has led to severe liquidity challenges for major developers like Evergrande and Country Garden. As a result, many housing projects remain stalled, further eroding buyer confidence and discouraging new investment.
To counteract the crisis, authorities have introduced various policy measures, including interest rate cuts and relaxed homebuying restrictions. However, these interventions have yet to produce significant results, as potential buyers remain wary of market volatility and the broader economic slowdown. Analysts suggest that without more aggressive stimulus efforts, the real estate sector could continue to weigh heavily on China’s economic growth.
The property sector has long been a critical driver of China’s economy, accounting for a significant share of GDP. A prolonged decline in home values could lead to ripple effects across financial markets, impacting banks, local governments, and related industries. Given the real estate market’s outsized role, policymakers face increasing pressure to implement stronger recovery measures to prevent further economic distress.
With no clear turnaround in sight, investors and homebuyers remain cautious, closely watching for any signs of stabilization. The coming months will be crucial in determining whether government interventions can finally reverse the downward trend or if China’s property sector will continue its slow descent.
