Hopes rise for support for Chinese real estate ahead of two sessions meeting

BEIJING — Chinese policymakers may finally be interested in tackling the country’s problem. worsening real estate crisisraising hopes that stricter support measures could be put in place later this year.

The Communist Party’s official newspaper Qiushi, meaning “seeking truth,” kicked off 2026 with a Jan. 1 article calling for “more powerful and precise measures” to stabilize expectations in the real estate market.

Since then, the Hang Seng China A Property Indexwhich includes developers Vanké And Seasrose more than 6% earlier this year, reflecting growing investor optimism.

Qiushi’s comment was notable for its scope, said Ting Lu, chief China economist at Nomura.

“This is the most comprehensive assessment of China’s real estate markets published in Qiushi since the sector’s collapse in mid-2021,” Ting said in a report earlier this week. “Its importance should not be overlooked.”

Official Chinese public comments, such as Qiushi’s articles, are closely monitored because they often signal internal policy debates and potential shifts in official thinking before decisions are announced.

The article was published ahead of China’s annual parliamentary meeting in March, when top leaders meet to set policy goals for the coming year. This year, the meeting will also release full details on its next five-year development plan.

“Beijing cannot afford to let its real estate sector collapse indefinitely, and much more decisive action is needed to truly stabilize the real estate sector and the economy as a whole,” Lu said.

“Given growing trade tensions and the likely unsustainable strength of the export sector, Beijing may eventually be forced to significantly intensify its policy measures.”

The slowdown in real estate in China has train despite a clear call from senior leaders in September 2024 to halt the decline of the sector. New home sales almost halved since Beijing began repress on the strong dependence of developers on debt for their growth, the areas sold in 2025 falling to the levels observed back in 2009according to a report released this week by China Real Estate Information Corp.

Measures introduced so far have focused on easing some restrictions on buyers, initially intended to stem speculation.

Qiushi’s article called for real estate policies to be implemented “all at once”, rather than a “piecemeal approach”.

Cliff Zhao, chief economist at China Construction Bank International, agrees. The policy actually needs to be more assertive, while targeted support for big cities could be very effective without costing too much, he said.

He added that details will likely only be revealed at the March parliamentary meeting or in subsequent high-level meetings focused on urban development.

Furthermore, Qiushi opposed Beijing’s view that real estate is no longer so important to the Chinese economy and warned that policymakers must prepare for possible bankruptcies of real estate companies still struggling with high debt levels.

Financial stress in the sector remains evident.

Vankéonce one of China’s largest real estate companies, has struggled to service its debts, prompting S&P Global Ratings downgrade the promoter’s debt. In recent weeks, Vanke narrowly avoided defaulting on a 2 billion yuan ($283 million) onshore bond originally due Dec. 15, 2025, before securing an extension.

In a broader sign of strain, outstanding loans from Chinese property developers fell in the third quarter from a year ago for the first time in more than a decade, according to official data seen via Wind Information.

Based on Qiushi’s article, the government should implement more innovative and targeted measures, Michelle Kwok, head of Asia real estate and Hong Kong equities research at HSBC, wrote in a report Thursday.

“The most effective policies are likely to be those that significantly reduce the financial burden on home buyers,” the report says. “In our view, focusing more on acquiring excess inventory will be a key step in resolving bottlenecks.”

Chinese developers have long sold apartments before completion, leaving buyers with mortgages. unfinished houses. But without funds from new sales or the ability to borrow, developers also struggled to complete construction.

For now, Larry Hu, chief China economist at Macquarie, forecasts that finished housing construction will decline by 12% in the coming year, following a 17% decline last year. He also expects a further drop in sales of new homes this year, of 7% in terms of surface area sold.

Hu said Beijing was unlikely to add much support until exports declined, perhaps “due to [an] AI collapse or Fed tightening,” he said in a report this week.

“If this is the case, Beijing will have to rely on domestic stimulus measures to achieve its growth target,” he said, stressing that “the most likely option” would be to support housing.

Nomura’s Lu cautioned that Qiushi’s article does not mean policymakers will act on every point. It noted that the author is deputy director of a research center under the Ministry of Housing, “suggesting that these views may not yet be fully endorsed at the highest level.”

In contrast, Lu said, a Qiushi article published in July, which flagged Beijing’s plans to combat excessive competition, used “a pseudo-byline that suggests the comment was fully endorsed by the leadership.”

This difference suggests that building a high-level consensus on support for ownership may take time, especially as Beijing may continue to prioritize technological competition with the United States.