economy
February 9, 2026
S&P is already predicting China's property slump will be worse than it expected this year
S&P Global Ratings said China's primary real estate sales will likely drop by 10% to 14% this year, steeper than the decline predicted back in October.
TL;DR
- S&P Global Ratings lowered its forecast for China property sales in 2026 to a 10%-14% decline, up from a previous 5%-8% prediction.
- The entrenched downturn is characterized by excess inventory, with the government seen as the only entity capable of absorbing unsold property.
- China's property market has seen annual sales volume halve in four years due to developer debt crackdowns and weak consumer demand.
- Oversupply has led to six consecutive years of completed, unsold new housing, pressuring prices to fall by an additional 2%-4% this year.
- Price declines in major cities like Beijing, Guangzhou, and Shenzhen worsened in Q4 2025, contradicting expectations of these markets leading a recovery.
- Falling prices create a 'vicious cycle' eroding homebuyer confidence.
- If sales fall 10 percentage points below S&P's base case, four of the ten rated Chinese developers could face downward rating pressure.
- Chinese authorities are focusing on high-tech industries rather than significant real estate support, a strategy insufficient to offset the property slump's economic impact.
- Shanghai was the only major city to report a home price increase in 2025 (5.7%).
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