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China property
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Mainland Chinese house prices expected to fall in 2022 as rest of world sees growth

  • Housing shortages, moderate mortgage rates and rising construction costs are seen boosting home prices globally
  • In China, the government is likely to implement even stricter measures to tame the property market, say analysts

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Fitch Ratings predicts a decline of 3 per cent to 5 per cent in China’s home prices in both 2022 and 2023. Photo: AFP
Dylan ButtsandCheryl Arcibal

Home prices are likely to grow in major markets across the globe in the coming year, according to property analysts.

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But there may be one notable exception: mainland China.
In its latest Global Housing and Mortgage Outlook, Fitch Ratings predicts a decline of 3 per cent to 5 per cent in China’s home prices in both 2022 and 2023, a sharp reversal of the growth momentum seen in previous years. The credit ratings company predicts more developers defaulting on their loans and increased government intervention in the market.

Home prices were estimated to have grown 2.5 per cent this year.

“Unlike the other countries in this report, China’s housing market is expected to face headwinds in both 2022 and 2023 and to experience falling home prices that mark a reversal of recent momentum,” the Fitch report said. “While we expect the authorities to intervene to contain market volatility, downside risks are substantial.”

Market forecast
Market forecast

Beijing has cracked down hard on the risky borrowing activities of property developers. It introduced its “three red lines” in 2020 – a set of metrics against which a developer’s corporate debt is evaluated, a move intended to improve the sector’s financial health.

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