China’s property crisis—now in its fourth year—could deepen further, with home prices potentially falling another 10% by 2027, warns Goldman Sachs.
The crisis began in 2021 following Beijing’s lending curbs aimed at reducing financial risk, which triggered a sharp slowdown in the housing market. China’s home prices have already dropped 20% since the peak, and recent data shows renewed weakness: May saw the steepest decline in new-home prices in seven months, and used-home prices fell at the fastest rate in eight months.
China’s cautious policy response—marked by limited monetary and fiscal support—contrasts sharply with other countries’ reactions to housing downturns. Analysts suggest that insufficient easing could prolong deflation and weaken consumer confidence and private demand.
It is expected that top-tier cities will lead the recovery around late 2026, but warns that without stronger policy intervention, the downturn could persist and weigh heavily on China’s broader economic outlook.
