By Liangping Gao and Ryan Woo
BEIJING, May 29 (Reuters) - China's home prices are expected to fall at a slower pace than forecast in a March survey and edge up in 2027, suggesting the sector remains under pressure but might be moving toward a slower adjustment phase.
Home prices are likely to fall 3.5% this year, slower than the 4.0% decline forecast in March, and rise 0.3% in 2027, versus the previous forecast of no change, according to a Reuters housing market poll conducted May 18-28.
Prices are
expected to rise 1.8% in 2028, up from a 0.5% gain forecast in the March survey.
China's home building industry is likely to remain in contraction in 2026, but the pace of decline should gradually slow as policy support continues, default-contagion risks ease, and new-home sales volumes approach long-term sustainable levels, said Lulu Shi, director of Asia-Pacific corporate ratings at Fitch Ratings.
Following the central government's renewed push to limit new projects and reduce housing inventory at the annual parliamentary meeting in early March, several Chinese cities have rolled out incentives, including subsidies, for homebuyers.
In late April, Shenzhen eased home-purchase restrictions in its core districts, while Guangzhou introduced home-buying subsidies.
Recent policy moves could accelerate stabilisation in core areas of higher-tier cities, while "suburban districts and lower-tier cities facing population outflows and industrial decline may remain under greater pressure," Shi said.
Property investment is expected to fall 12.0% this year, compared with a 10.3% decline forecast in March, while sales are expected to slump 8.3%, deeper than the 6.5% decline predicted previously.
Weak household confidence in jobs, incomes, and home-price expectations would continue to weigh on demand, said Huang Yu, executive vice president of the China Index Academy.
The policy priority is to stabilise the property market and avoid a disorderly slowdown, rather than revive the sector through forceful stimulus, analysts said.
The key policy objective is to "prevent the risk of a sharp loss of momentum," said Yingxue Ren, associate director of corporate ratings at S&P Global (China) Ratings, adding that authorities still have room to increase support if needed.
(Other stories from the Q2 Reuters housing market polls)
(Reporting by Liangping Gao and Ryan Woo; Editing by Rashmi Aich)
