By Liangping Gao and Ryan Woo
BEIJING, Aug 28 (Reuters) - China's home prices were expected to fall slightly less this year than previously forecast, while declines in property investment and sales were set to deepen, a Reuters poll showed, underscoring a crisis-hit property sector yet to stabilise.
Home prices were expected to decline 3.4% in 2026, a marginal improvement from the 3.5% drop predicted in the previous survey in May, according to a forecast of 11 institutions polled from August 17 to 27.
Prices were forecast to fall 0.3% in 2027, reversing from the 0.3% rise projected three months earlier.
Property investment was expected to shrink 20% this year, deeper than the 12% decline in the May poll, while sales by floor area were forecast to drop 10%, compared with an 8.3% fall predicted previously.
The findings added to signs that China's years-long property downturn, which began in 2021 after a regulatory crackdown triggered a liquidity crunch among developers, continued to weigh heavily on the broader economy.
China's housing market has moved into a prolonged adjustment phase, with policy now focused on containing financial risks, completing unfinished projects, reducing excess inventory, and gradually restoring buyer confidence.
Hui Ka Yan, once Asia's richest person and the founder of China Evergrande, was sentenced to life in prison last week by a Chinese court. But the fallout from the property crisis ground on.
"The government has limited interest in engineering a turnaround in the property cycle. Main policy efforts center on clearing excess housing stock, while new residential projects will be sharply reduced," said Dan Wang, China director at Eurasia Group.
Despite incremental improvement in prices in the biggest cities, economists said a broad-based turnaround would take time.
While home prices in top-tier cities showed phased and cyclical improvement, price divergence persisted within cities due to location and property quality rather than a broad-based rally, said Yingxue Ren, associate director of corporate ratings at S&P Global (China) Ratings.
The standalone momentum in top-tier markets was likely to provide limited spillover to lower-tier cities, where property prices continued to search for a bottom, Ren said.
(Other stories from the Q2 global Reuters housing poll)
(Reporting by Liangping Gao and Ryan Woo; Editing by Saad Sayeed)
