(Dec 31): China’s residential property sales in December were flat on-year, avoiding a downturn seen much of 2024 and reflecting signs of market stabilisation after the government’s stimulus blitz.

The value of new-home sales from the 100 biggest real estate companies for the month remained unchanged from a year earlier at 451.4 billion yuan (RM276.08 billion), compared to a 6.9% on-year drop in November, according to preliminary data from China Real Estate Information Corp. Sales gained 24.2% from a month earlier. 

For all of this year, sales from the top 100 builders slumped 28.1%, compared to a 16.5% drop in 2023. 

China unleashed its strongest package of policies to boost the residential market in the past three months. The government cut borrowing costs on existing mortgages, relaxed buying curbs in big cities and lowered taxes on home purchases. It also trimmed purchasing costs for people seeking to upgrade dwellings in some big cities. 

The residential market in so-called first-tier metropolises like Shanghai “may turn more active in the short term”, said Chen Wenjing, a research director at China Index Holdings. “Should the enthusiasm continue, it may help stem the decline in home market nationwide.”

China’s economic outlook for next year and beyond is uncertain. The government reaffirmed it’s on track to hit this year’s official growth target of around 5%. Many economists expect the government to set a similar goal for 2025. 

Investors are closely watching whether China’s longest housing slump shows signs of ending. For now, the fragile recovery shows the sector remains a troubled spot for the economy, with smaller cities struggling. 

Morgan Stanley expects China real estate sales to drop 12% next year, and home prices to decrease by high single digits in percentage terms from November’s level. Fitch Ratings said prices could fall by 5% in 2025 and new-home sales to decline 10% by area. 

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