By Liangping Gao and Ryan Woo

BEIJING (Reuters) – China’s property prices are expected to fall more slowly this year and next and stabilize in 2026, a Reuters poll showed, as a series of support measures aimed at reversing a years-long property slump begin to bear fruit.

The survey’s analysts now expect house prices to fall by 6.0% in 2024, compared to a previous survey in August that predicted a fall of 8.5%. In October, year-on-year prices for new build properties fell the most since 2015, but the declines narrowed month-on-month.

Prices are expected to fall by 2.0% in 2025 and rise by 1.6% in 2026, compared to 0.0% in the last survey.

China has stepped up efforts to halt the real estate downturn that began in 2021, which has squeezed funding for local governments and discouraged homeowners and businesses tied to a sector that once accounted for a quarter of the country’s economic activity.

Policymakers made changes to the rules for the real estate sector in late September, including lowering the minimum down payment ratio to 15% for all housing categories and easing restrictions on home purchases.

The Treasury introduced tax breaks in November to boost demand. But a broader consumer and investor confidence crisis is keeping potential buyers’ wallets closed.

“The decline in property prices in the current property cycle is mainly influenced by supply and demand and home buying expectations,” said Gao Yuhong, manager at CSCI Pengyuan Credit Rating.

“Real estate prices in first-class cities are expected to stabilize in the second half of next year,” Gao said.

The survey of 13 analysts, conducted Nov. 15-28, found that home sales are expected to fall 5.0% in 2025, less than the 10.0% slump forecast in the previous survey, while investment is expected to fall by 8.0%, compared to a 7.5% decline forecast in August.

“Since the end of September, the combined effect of the policy cascade of monetary, fiscal, real estate and other measures has led to a significant recovery in real estate sales in October, indicating a positive stabilization trend,” said Wang Xingping, a senior analyst at Fitch Bohua.

“The policy of allowing the use of special bonds to purchase land and existing housing is an important measure to reduce inventory and stabilize the real estate market, but continued efforts are still needed,” Wang added.

(Other stories from the fourth quarter Reuters global housing survey)

(Reporting by Liangping Gao and Ryan Woo; Additional reporting by Shuyan Wang; Editing by Kim Coghill)