According to Sheng Songcheng, a former director of the People’s Bank of China’s Statistics and Analysis Department, China’s property market may continue to experience a downturn for another two years before stabilizing, Invest-Gate reports.

Songcheng made these remarks at a forum in Shanghai, stating that new home sales across the country are expected to decrease by an additional 50 million square meters annually in both 2024 and 2025. He projected that the total annual sales in 2025 would reach around 850 million sqm, suggesting a plateau in the market. After this period, Songcheng believes the property industry will no longer hinder investment and economic growth.

Songcheng’s comments come as Chinese home sales experienced a further decline in December, despite additional support measures and the relaxation of homebuying restrictions in major cities. China has faced an unprecedented housing slump in recent years, leading to significant economic repercussions and increased financial risks due to a surge in developer defaults.

However, Songcheng noted that there were signs of recovery in the property market in November and December, which resulted in estimated nationwide sales of approximately 950 million sqm for the full year. He suggested that the pace of sales decline would moderate by half in 2023 compared to the previous year, indicating a potential improvement in the market.