Recently, the National Bureau of Statistics released the basic situation of China’s real estate market in 2024, showing improvements in multiple indicators. On the 17th, Kang Yi, Director of the National Bureau of Statistics, stated at a press conference held by the State Council Information Office that the real estate market has seen an increase in positive changes under the influence of a combination of policies, and market confidence is gradually being boosted. With the effective implementation of both existing and new policies, the real estate market is expected to continue to improve in the next stage.

How did the real estate market perform in terms of sales, investment, and financing in 2024? What are the prospects for the real estate industry in 2025? To address these questions, China News Service Finance interviewed several experts for insights.

Sales: Under optimistic scenarios, the sales area of commercial housing may stabilize

According to data from the National Bureau of Statistics, in 2024, the sales area of newly built commercial housing was 973.85 million square meters, a decrease of 12.9% from the previous year, with the decline expanding by 4.4 percentage points compared to 2023. The sales volume of newly built commercial housing amounted to RMB 9.675 trillion, a decrease of 17.1%, with the decline expanding by 10.6 percentage points compared to 2023.

“The demand center continues to shift downwards due to macroeconomic disturbances, diversion by the second-hand housing market, and other factors, while the greater decline in sales volume is mainly impacted by price shocks,” said Wang Wen, Co-Chief Analyst of Real Estate at Tianfeng Research. “However, from a temporal perspective, compared to 2023, thanks to active policy guidance, the month-on-month sales growth rate has shown an overall trend of recovery. The end of the first and third quarters were turning points for marginal changes in fundamentals, and there is already a basis for price and volume stabilization.”

Specifically, the real estate industry continued to show an adjustment trend in 2024. The “517” new policies in the first half of the year and the “924” new policies in the second half injected confidence into the market, leading to a phased rebound in the industry, particularly in key cities.

With the introduction of the “517” new policies, the decline in commercial housing sales volume narrowed significantly in June. Subsequently, the beneficial effects of the policies diminished marginally, and the market quickly fell back, with the decline expanding in July and August. Since the end of September, favorable policies for the real estate market have been frequently introduced. The Political Bureau of the Central Committee of the Communist Party of China has, for the first time, proposed the goal of stabilizing the real estate market and preventing it from declining, aiming to boost market confidence, improve expectations, and promote positive changes in the real estate market. Sales data continued to improve in October and November, with the monthly sales area and sales volume of commercial housing turning positive for the first time in the year in November, at 3.25% and 1.38% respectively.

From the data, since the second half of 2024, the cumulative year-on-year declines in the sales volume and sales area of newly built commercial housing nationwide have continued to narrow. The cumulative year-on-year decline in the sales area has narrowed for seven consecutive months, and the decline in sales volume has narrowed for eight consecutive months. Especially since the fourth quarter, the cumulative declines have narrowed rapidly, indicating a recovery in market confidence.

Focusing on key cities, according to the China Index Academy, the year-on-year decline in new housing sales area in the top 100 cities ended a 16-month streak of declines in October, with sales continuing to rise in the fourth quarter. In December, driven by “tax reduction” policies and centralized contract signing, the transaction volume in multiple key cities showed a “tail-up” trend.

Looking ahead to 2025, Cao Jingjing, General Manager of the Research Index Department at the China Index Academy, believes that the recovery of new housing sales still faces some challenges, such as the fundamental shift in residents’ income expectations not yet occurring, insufficient effective supply, and the “substitution effect” of the second-hand housing market on new housing.

According to predictions by the China Index Academy, under neutral scenarios, it is expected that the sales area of commercial housing nationwide will decrease by 6.3% year-on-year in 2025. Under optimistic scenarios, if policies such as monetizing the resettlement of 1 million urban villages and purchasing and storing existing homes are implemented more quickly, the sales area of commercial housing nationwide may stabilize in 2025. At the same time, the stable operation of the macroeconomy, as well as improvements in residents’ employment and income, are also necessary conditions for the stabilization and recovery of the real estate market.