Beijing’s Push to Revive China’s Property Market

August 11th, 2025
Patrick Li

It’s been a rough while for Chinese investors. For the past three consecutive years, China’s property market—following economic liberalization—was a sector once lauded as ‘bulletproof.’ Yet recently, the market has been in freefall, forcing Beijing into a delicate cost-cutting act. Developers collapsed under mountains of debt, local governments saw land-sale revenues dry up and thousands of ordinary Chinese had to bear their eyes on the sight of eerily empty and unfinished skyscrapers—from unrenewed contracts—in developing areas became a common occurrence. Yet in the past year, an unexpected shift has begun to appear: for the first time since the crisis began in 2023, the narrative has tilted—ever so slightly—toward hope.

For the past 6 months, bidding wars on luxury villas have spiked, some tentative buyers have returned to big cities, and assertive fiscal pushes from Beijing—in tandem with all else—have stoked hopes. “For the first time since the start of the crisis,” the Economist wrote, “you can make a decent case that the end is in sight.” And in fairness, statistics support this conclusion. The government has rolled out record special treasury bond issuance—up to 3 trillion yuan—to shore up local finances and stimulate construction. Offshore default rates, which spiked in 2022, have since dropped sharply.

Yet beneath the surface, this optimism looks less like a tide turning and more like a minute ripple effect. Official data from June told a colder truth: new home prices fell 0.3% month-on-month—the fastest drop in eight months. A Reuters/Ipsos poll of market sentiment found 60% of Chinese households still believe property values will fall over the next year. Fitch Ratings expects sales of new residential property to decline by another 5% in 2025, warning that “...sentiment remains fragile and regional disparities persist.”

Part of the challenge is that this isn’t just their housing market woes—it is both macroeconomic and foreign. Years of overbuilding from hype (that would oftentimes feed on itself) left “ghost cities” in lower-tier regions, while household income growth has slowed under the weight of global headwinds. Tariff escalations from Washington—stretching all the way back to the Biden Administration—have cut into export-driven manufacturing, limiting wage growth in factory-heavy provinces. U.S. export controls on semiconductors have dented high-tech investment. As one Beijing-based economist put it, “You can’t have a strong property recovery if people aren’t confident in their jobs.”

Beijing has tried to counter those headwinds with a mix of targeted bailouts and moral persuasion. Ni Hong—China’s housing minister—declared in March, “The property sector is showing positive changes and market confidence is improving.” Mortgage rules have been loosened in select cities, down payment requirements cut and state-owned enterprises have quietly been nudged to take over stalled projects.

But many of the sector’s highest-profile implosions remain unresolved. Evergrande is still in liquidation proceedings. Country Garden continues to negotiate with offshore creditors. And state-run Vanke—long considered a “safe” developer—has faced its liquidity rumors. Put simply, these sagas have eroded public trust in the presale model that, in the past, had funded much of China’s residential construction.

Again, recent foreign policy has added another layer of complexity. The Trump administration’s second-term tariff hikes and continued export restrictions have forced Beijing to accelerate domestic stimulus to offset weaker trade revenues. The World Bank has warned that these measures, if prolonged, could shave more than half a percentage point off China’s GDP this year, further constraining the fiscal space to prop up the housing market.

Still, there are those betting on a turnaround. UBS analysts suggest the market could bottom out in late 2025 if stimulus continues at its current pace and confidence slowly rebuilds. “The latest activity data suggest that the most acute phase of the housing crisis may now be behind us,” says CiaxaBank, an investment bank. “...but there is still a long way to go.”

And therein lies the main issue. The government’s tools—special bonds, developer rescues and selective easing can stabilize the floor, but they can’t easily restore the speculative fervor that once drove China’s property machine. Without that, recovery will likely be patchy, favoring wealthy cities and deep-pocketed buyers while leaving lower-tier regions behind.

The official narrative now hinges on convincing both domestic buyers and international markets that the worst is over. But with prices still sliding, foreign policy headwinds stiffening, and trust in developers deeply shaken, Beijing is walking a fine line between projecting confidence and managing reality.

Extemp Analysis by: Daphne Kalir-Starr

Question: Is the Chinese property market finally stabilizing?

AGD: I think the easy way to take this AGD is humor. The opportunities are pretty endless. You could use a story like this, setting up the joke with something like "Recently, a viral video game in China has measured how quickly citizens can clap for Xi Jinping. Tragically, no one is cheering for the Chinese economy today. (I know this is less than ideal, but you get the point). However, I will always offer up the alternative option of an advocative AGD. Tell a story of someone who saw the value of their home plummet. Talk about the ghost towns seen in China today, and contrast it with the amount of unhoused individuals in the country.

Background: A tight three sentences! The first should be introducing China’s property woes historically. Second sentence should be about how people have hoped that they’re rebounding. The third sentence should be about the recent data in June subverting those expectations.

Sig: I would probably impact this to how much wealth Chinese citizens stand to lose in their wealth due to a property bubble collapsing. Linking this to the 2008 crisis would be a nice flex!

Answer: No – situations for stabilization aren’t apparent

Need for the property market to stabilize (expectation)
Why the CCP is not fulfilling it (lack of verification)

Collapse of major firms prevents investment (make this a point abt how major firms like Everglande are going out of business and selling a bunch of property which undermines the market)
Citizens are unwilling to invest (talk about how citizens are struggling w/ employment in part bc of Trump’s tariffs which lead to them unwilling to buy houses)
The CCP continues to manipulate data (this should be a point about how part of the reason why the markets plunged in the first place was that investors lost confidence in the data released by the CCP, and they’re continued to manipulate the info)