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Fitch Expects CN Real Estate Industry to Keep Contracting Next Yr, Forecasts New Home Sales to Drop 7-8%
Recommend 20 Positive 26 Negative 10 |
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In Fitch Ratings' prediction, China's real estate industry may keep contracting in 2026, with new residential sales expected to decline by 7-8% to approximately RMB7 trillion, mainly due to an anticipated 5% decrease in sales area and a low single-digit percentage drop in average selling prices. Fitch believed the industry still faces several structural challenges, including demographic changes, uncertain employment environment, weak homebuyer affordability, and high stocks of unsold homes. However, due to ongoing policy support, reduced contagion risk from debt defaults, and new home sales gradually approaching Fitch's expected long-term sustainable levels, the decline in sales was expected to taper off. Fitch also suggested that industry stabilization requires a comprehensive policy package, including economic stimulus, improvement in labor market conditions, and effective destocking measures. If macro-level government policies fail to restore confidence, housing prices may fall more than Fitch's forecasts, potentially wreaking further market disruption through rising residential mortgage delinquencies and increased instances of negative equity. AASTOCKS Financial News Website: www.aastocks.com |
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