China Property Market: Population Decline Impact
- QINGZHOU,China - china's real estate sector,already struggling with a multi-year downturn,now faces a new challenge: a shrinking population.
- Goldman Sachs projects that demand for new homes in Chinese urban centers will remain suppressed, falling to under 5 million units annually in the coming years.
- Tianchen Xu, a senior economist at Economist Intelligence Unit, said World Bank data indicates China's population is estimated to fall below 1.39 billion by 2035, down from 1.41...
China’s property market confronts a meaningful challenge: a shrinking population’s impact on housing demand, as detailed in this report. Reduced demand for new homes, dropping birth rates, and the closure of numerous schools paint a concerning picture for the real estate sector. Experts analyze the role of demographics on the housing market. Discover how economists anticipate these shifts reshaping urbanization trends and how falling prices in specific markets reflect this demographic drag. news Directory 3 provides insights into the measures underway.What will the future hold for China’s property market? Discover what’s next for those invested.
China’s Property Market Faces Demographic Headwinds
Updated June 21,2025
QINGZHOU,China – china’s real estate sector,already struggling with a multi-year downturn,now faces a new challenge: a shrinking population. This demographic shift casts a long shadow over the stagnant property market, impacting demand for new homes and reshaping school-adjacent housing markets.
Goldman Sachs projects that demand for new homes in Chinese urban centers will remain suppressed, falling to under 5 million units annually in the coming years. This represents a significant drop from the peak of 20 million units in 2017.Economists at Goldman Sachs noted that declining population and slowing urbanization suggest a decrease in demographic demand for housing.
Tianchen Xu, a senior economist at Economist Intelligence Unit, said World Bank data indicates China’s population is estimated to fall below 1.39 billion by 2035, down from 1.41 billion. this decline is attributed to fewer newborns and increased deaths within an aging population. The shrinking population is expected to reduce home demand by 0.5 million units each year in the 2020s and by 1.4 million units annually in the 2030s, according to Goldman Sachs. This contrasts sharply with the 2010s, when a rising population contributed to a positive increase of 1.5 million units.
Despite Beijing relaxing its one-child policy in 2016 and implementing cash incentives to encourage child-bearing, the country’s fertility rate continues to decline. Stagnant incomes, job instability, and a weak social security system have discouraged young Chinese from having more children. Xu believes that Beijing’s pronatalist policies will likely have limited impact because they fail to address the underlying issues, such as the high economic costs of raising children and the increasing tendency to postpone marriage for career advancement.
The declining birth rates are evident in the closure of nearly 36,000 kindergartens across China over the past two years, resulting in a decrease of over 10 million preschool students. Data from the Ministry of Education also reveals that the number of elementary schools dropped by nearly 13,000 between 2022 and 2024.
this demographic shift is rippling through school-adjacent housing markets,which onc experienced inflated prices due to high demand for better public schools. William Wu, a China property analyst at Daiwa Capital Markets, said the premium once associated with access to elite schools and expectations of rising property values has started to diminish as local governments scale back district-based enrollment policies.
One Beijing mother reported that the price of her apartment, purchased to secure her son’s enrollment in a good elementary school, has fallen by about 20% in the past two years. While the number of children entering primary school reached a two-decade high in 2023