UBS expects that the downturn in China's real estate market is not over, predicting that housing prices will need to decline for at least another two years

UBS China Real Estate Research Head John Lam has retracted his previous optimistic forecast for the Chinese property market, stating that the prolonged downturn in the market, which has lasted for four years, is far from over.

He predicts that the Chinese property market will decline for at least another two years before a genuine recovery can be seen. One reason for this is that potential buyers are increasingly inclined to rent due to the likelihood that homeowners from the past decade may be losing money, fundamentally altering public expectations regarding property prices.

He further indicated that unless China introduces significant stimulus measures, it is expected that the prices of second-hand homes in first-tier cities will drop another 10% next year and decline by another 5% by 2027. As the rental yield in first-tier cities is significantly lower than mortgage rates, more and more people will choose to rent rather than buy, believing that the decline in property prices will only stop once rental prices stabilize