Catenaa, Saturday, February 14, 2026-S&P Global Ratings lowered its forecast for China’s property market, saying the housing downturn is likely to deepen further this year as oversupply and weak demand persist.

The ratings firm said primary home sales in China are now expected to fall 10 percent to 14 percent in 2026, down from its earlier estimate of a 5 percent to 8 percent decline. The revision comes less than two months into the year and reflects slower absorption of unsold housing and continued pressure on prices.

China’s property sector, which once accounted for more than a quarter of economic activity, has seen annual sales volume cut roughly in half over the past four years. S&P said sales fell 12.6 percent in 2025 to 8.4 trillion yuan, far below the 18.2 trillion yuan recorded in 2021.

Developers have continued building despite falling demand, leading to a sixth straight year of completed but unsold new homes.

S&P said the excess supply is likely to push nationwide home prices down another 2 percent to 4 percent this year, following a similar decline in 2025.

The report said price declines worsened late last year in major cities once seen as potential leaders of a recovery.

Beijing, Guangzhou and Shenzhen each posted price drops of at least 3 percent in 2025, while Shanghai recorded a gain of 5.7 percent.

S&P said only the central government has the balance sheet to absorb large volumes of unsold housing, potentially through purchases for affordable housing, but added that current measures remain limited.

If sales fall well below its base case this year and next, S&P said several rated Chinese developers could face further credit pressure.