After a yearslong slump, China's real estate market may be set for a turnaround

CNBC reports that S&P Global Ratings expects China’s yearslong real estate slump to be nearing its bottom. In its latest forecast, S&P says residential prices may hit a low in the third quarter of 2028, with prices in major cities such as Beijing and Shanghai recovering as soon as next year.

The article points to policy shifts as the main change from S&P’s earlier view that high levels of unsold homes kept recovery out of reach. It cites restrictions introduced in August on developers’ ability to sell unfinished properties, followed by further “stabilizing” measures announced after Premier Li Qiang’s comments. It also notes that Beijing launched a mortgage rate subsidy for first-time homebuyers for units under 1.5 million yuan and smaller than 120 square meters.

S&P analyst Edward Chan, quoted by CNBC, argues that these rules should make developers more cautious about buying land and launching new projects. While this may weigh on developer revenue, it could help tackle an oversupplied market by reducing supply, with 2026 described as the first year of inventory destocking. The piece also frames the S&P forecast alongside plans for corporate deleveraging, and references comparisons to past housing crises.

For FX traders, the key follow-up is whether the supply reduction described by S&P translates into sustained inventory declines and stabilising prices in the largest cities—signals that can feed back into China’s growth and risk sentiment.