Qingzhou, China – June 16, 2025 – Citizens are looking at a sand table in the sales office of a commercial residential property development in Kingjou City, Shedong Province on 16 June 2025.
Cfoto | Future publication | Getty images
China’s real estate sector has been struggling with deep recession for years. Now a shrinking population is putting another shade on the stable property market.
Goldman Sachs estimates that the demand for new houses in Chinese urban cities will be reduced by 5 million units per year in the coming years – one fourth of the peak of 20 million units in 2017.
Economists of Goldman Sachs said in a note on Monday, “Suggestions to reduce demographic demand for falling population and slow urbanization housing”.
The country’s population is estimated to be below 1.39 billion by 2035 According to the latest data of the World Bank, 1.41 billionSenior economist Tianchen Ju, a senior economist of the economist intelligence unit, said, citing less newborns and more deaths than an aging population.
The shrinking population will meet the demand of 0.5 million units every year in the 2020s and a lead for a large dent of 1.4 million units annually in the 2030s, Goldman Sachs estimates, compared to a positive contribution of 1.5 million units in the 2010s when the population was on a steady increase.
The breeding rate has continued to fall in the country Even Beijing relaxed its one-child policy in 2016, and despite efforts to encourage the child through the cash incentive of Beijing. Standing income, instability on job prospects and a poor social security system have prevented Chinese youth from having more children.
Beijing’s ubiquitous policies will possibly have a “limited effect” as they do not address deep roots issues, Ju said, such as the impact of the child, for the impact of the child, the tendency of people to postpone marriage for high economic cost and career progression for the progress of the child and “a hug of personality.”
Underlining the decline in birth rate, around 36,000 kindergartens across the country have been closed over the last two years, the number of students in the preschool fell over 10 million. This is according to the CNBC officer’s calculation Statistics released the Ministry of EducationSimilarly, Number of primary schools Between 2022 and 2024 dropped by about 13,000.
It is waved through school-unorganized housing markets, which was once observed prices bloated on the back of strong demand for better public schools.
Once the large premium was fuel by access to elite schools and expectations of rising property values. According to Chinese property analyst William Wu at Daiwa Capital Markets, a shrinking population and local governments bring back the district-based enrollment policies, with the additional value of these houses being reduced.
A mother of a 7 -year -old boy in Beijing told CNBC that the price of her apartment had fallen by about 20% from two years ago when she bought it. Its average price for an apartment in the city is almost double that his son can participate in a good primary school.
The number of children entering primary school in 2023 in 2023 reached the highest level in two decades, according to the air, before leaving in 2024, the year in which their son enrolled.
Hard recession
This demographic change is an additional overhang for the property market, which has been struggling to emerge from a painful recession since the end of 2020. Central and local government measures Since last September, the real estate recession has shown very few signs of reducing.
In seven months in May, the prices of the new house fell at their fastest pace, according to Larry Hu, the main China economist in McCery, with the aim of arresting the arrest despite the government’s efforts, expanding a two -year stagnation.
In the first half of this month, the sales of the new house in 30 major cities fell in 11% year, which deteriorated by 3% in May, said Hu said.
Goldman Sachs estimates, “The holders of investment assets are likely to be a pure vendor (owner-oxuar) for the future,” hopefully house prices will fall, Goldman Sachs is estimated.
While Goldman hopes that China’s increase in urbanization rate in the coming years, damaging the demand for urban housing, Wu said that the demographic drag on the property market was not yet “adjacent” and may take decades to play.
In the proximity word, “some of this decline will be offset with constant urbanization, and housing upgradation,” Wu said, because later will be responsible for the increasing stake of China’s total housing demand.
– Evelyn Cheng of CNBC contributed to this story.
