It's been over four years since Evergrande's collapse sent shockwaves through China's property market – and the hits keep coming. Debt, liquidity, and flagging confidence continue to loom over the sector. Elaine Yu has more on what to watch in 2026.

Shanghai

China's property market has experienced significant turmoil following government crackdowns on developer borrowing, resulting in a liquidity crisis and millions of unfinished homes. Falling home values have eroded household wealth and dampened consumer confidence, with secondhand home prices dropping sharply across major cities.

In response, Chinese leaders have identified stabilizing the property sector as a priority, considering measures such as state purchases of unsold homes and mortgage subsidies. However, analysts do not expect a rapid recovery, projecting that prices may not stabilize until at least early 2027. The International Monetary Fund has also urged China to allow unviable developers to exit the market.

China's property crisis: Is recovery possible in 2026?

Nearly a decade ago, President Xi Jinping declared that houses are for living, not speculation, setting the stage to deflate China's debt field property bubble. A crackdown on developers' heavy borrowing followed, triggering a liquidity crisis and leaving millions of homes unfinished. Plunging home values wiped out household wealth. This crushed consumer confidence and their willingness to spend. For most of 2025, Beijing stayed hands-off as prices kept falling, suggesting a correction was necessary. Now the tone has shifted. Chinese leaders named stabilizing the sector a key task for next year. But don't expect a quick fix. Analysts see prices bottoming in early 2027 at best. Probably we're going to see more intervention in the, let's say, in three to four months time. Yeah, because there's the growing need to backstop the prices. The numbers are stark. In November, secondhand home prices across a hundred cities fell steepest this year. Tier one cities are falling faster than smaller markets. Beijing's agenda-setting meeting in December focused on clearing inventory and encouraging state purchases of unsold homes for affordable housing. Economists also expect interest subsidies for mortgages and looser buying rules in some cities. I think going to next year, all these options are open. But the question is how much resources the government will have to provide and where the money comes from. Inventory plays a role. Guangzhou lifted buying curbs last year, but prices have stayed weak due to oversupply, according to the Economist Intelligence Unit. Hangzhou, home to startups like DeepSeek and Unitree, also relaxed rules and fared better thanks to reduced inventory and an influx of tech talent. Shanghai's ability to attract people helped soften the blow, while Beijing's strict population and home buyer restrictions are keeping a lid on activity. Secondhand prices in the capital are tumbling and could drop further as buyers favor newly built homes, says a Beijing-based agent. The further prices fall, the more buyers fear purchasing at a high price point. This wait-and-see sentiment is becoming severe. The negative equity trap is hitting hard. One Beijing homeowner bought for 2.6 million yuan and is now listing at 2.25 million, the agent says, meaning they'll need extra cash to repay the loan if the property sells. But any stimulus measures may be conditional on further price drops. Meanwhile, the IMF has urged China to let unviable developers go, calling them zombie firms. That's a tough choice, right? I mean, you know, this really is kind of a trade-off between short-term and long-term pain. Intervention is on its way, but for now, caution looms large.

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Washington

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Beijing

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Moscow

Ukraine Invasion

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Taipei City

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Washington County

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Kyiv

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Salem

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Council of the City of Sydney

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Breakdown