AsianFin--China's housing market is expected to experience a sharper decline in home prices than previously forecast for 2024 and 2025, according to a Reuters poll. This downturn comes as Beijing's support measures struggle to stabilize the struggling property sector.

The poll projects that home prices will fall by 8.5% in 2024, a significant revision from the 5.0% decline predicted in May. For 2025, prices are anticipated to decrease by 3.9%, matching the unchanged forecast from earlier in the year.

Ma Hong, a senior analyst at GDDCE Research Institution, explained that the reduction in funding available to property developers has severely impacted housing demand. "My forecasts for home prices have been adjusted downward from May due to ongoing cash flow issues for major real estate companies, which are exacerbating risk exposure and undermining market confidence," Ma noted.

The prolonged property crisis, which has persisted since 2021, has led to high inventories of unsold apartments, straining developers' finances and putting downward pressure on home prices, consumer confidence, and overall economic activity.

In response, Chinese policymakers have ramped up efforts to support the sector, which once represented a quarter of the economy. Measures have included reducing mortgage rates and lowering home buying costs.

The poll, conducted among 10 analysts from August 26-29, also indicated that property sales are likely to decline by 16.0% in 2024, a sharper drop than the 10.0% forecast in the previous poll. Investment in the sector is expected to decrease by 10.3%, slightly more than the 10.0% decline projected earlier.