At the end of February 2026, Chinese authorities are discussing an expansion of support measures for the construction sector amid a prolonged downturn. A “white list” program is already in place, under which state-owned banks provide financing to complete unfinished projects. The total approved lending under this program has exceeded 7 trillion yuan (approximately $1 trillion).

🏗️ The scale of the downturn is confirmed by official data: real estate investment in China declined by 17.2% year-on-year in 2025, extending the contraction that began in 2022. This marks one of the longest downturns in the sector in recent decades.

💰 The financial position of developers remains unstable. Following tighter regulations introduced in 2020 and restrictions on borrowing, a significant number of companies have faced funding shortages. According to industry data, the number of developers with annual sales exceeding 100 billion yuan fell from 41 in 2021 to 10 in 2025, indicating a sharp contraction of the large-scale segment of the market.

A major issue remains unfinished construction. According to Nomura estimates, China has accumulated approximately 20 million pre-sold but unfinished housing units. At the same time, government programs have partially reduced this backlog: between August 2022 and December 2025, around 7.5 million previously delayed homes were completed and delivered to buyers.

📑 The measures under discussion are aimed at stabilizing the sector and restoring sales. Authorities are considering expanding credit support for developers through state-owned banks, increasing funding to complete stalled projects, and easing home purchase conditions, including lowering down payment requirements and improving access to mortgages.

Despite the measures already introduced, the market remains under pressure. According to S&P Global Ratings, new home sales in China could decline by a further 10–14% in 2026, reflecting ongoing oversupply and weak demand.

🏙️ Additional pressure comes from the structure of supply. In many regions, particularly in smaller cities, excess housing inventory continues to limit price growth and slow market recovery. Conditions are more stable in major cities, although activity remains below previous levels.

Under these conditions, authorities are increasing their involvement in the sector, simultaneously supporting developers and accelerating project completion, as the delivery of pre-sold housing remains a key factor in restoring buyer confidence.

In the short term, authorities expect a temporary increase in supply, as property owners may seek to sell before new regulations take effect.