Fitch Ratings expects lingering weakness in China's residential property market for the remainder of 2026, with new home sales forecast to decline by 11% to 13%, according to a recent release.
The new forecast is down from the previous estimate of a 7% to 8% annual drop.
The more moderate expectation stems from further policy easing, less contagion risk from developers' defaults, and a more sustainable level of sales volume, Fitch said.
However, new residential home sales declined 14.1% in the first five months of the year, indicating a rebound that is fragile instead of self-sustaining, Fitch said.
Weaker results in lower-tier cities offset continued easing in tier-one cities, reflecting dependence on a small group of stronger markets for national sales, the rating agency said.