The latest official financial data shows that the demand for household credit in China continues to remain weak. In February this year, short-term loans to households decreased by 359.6 billion yuan, raising concerns in the market about the prospects for consumption and real estate.
On March 13, the People’s Bank of China released the financial statistical report for February 2026.
From January to February 2026, total RMB loans increased by 5.61 trillion yuan, but the performance of household loans in February was weak:
Short-term loans to households decreased by 359.6 billion yuan, while medium and long-term loans to households increased by 165.4 billion yuan (mainly supported by factors such as housing loans, but with limited growth).
Household loans decreased by approximately 194.2 billion yuan that month.
Meanwhile, Chinese residents’ savings are still increasing rapidly. According to data released by the central bank, household deposits increased by about 1.7 trillion yuan in 2025. Residents are reducing loans on one hand and increasing savings on the other, showing that in uncertain economic circumstances, households are more inclined towards conservative financial management rather than expanding consumption.
In the central bank’s perspective, short-term loans to households (with a term of less than one year) mainly include credit card overdrafts, consumer loans, short-term operating loans, and some small loans.
Why has there been a significant decrease in short-term loans? According to the Beijing Business Daily, several financial institutions believe that weak consumer demand and a sluggish real estate market are the main reasons.
Wang Qing, chief macro analyst at Oriental Jin Cheng, stated that the reduction in household loans is mainly due to the continued adjustment of the real estate market, as well as the impact of weak individual business operations and consumer demand.
He mentioned that in the past two years, the growth of household loans in China has significantly slowed down, with some months even showing negative growth. It is widely believed that this reflects a decrease in household willingness to consume and the impact of continued real estate market adjustments on household asset expectations.
In addition to institutional analysis, some financial bloggers also interpret this phenomenon from the perspective of real estate.
Financial blogger “Big Difference” pointed out that the core issues of domestic demand, consumption, investment, CPI, PPI, local debt, etc., all revolve around the real estate problem. How to effectively solve the four-year decline in China’s real estate market? How to make the public feel more empowered in the process of economic development rather than feeling exploited? These are the issues the government should be most concerned about.
According to his estimate, in the past four years, the total market value of real estate has dropped from 45 trillion yuan to 30 trillion yuan, which is extremely unstable! The government’s work report at the Two Sessions this year only included less than 200 words about real estate, emphasizing “efforts to stabilize the real estate market.” To “stabilize the real estate,” housing prices must rise, as stability without rising prices is not realistic.
While some cities have seen a slight increase in the volume of second-hand housing transactions, most transactions are based on price reductions, showing characteristics of “swapping price for volume” in the market.
Financial blogger “Huihu” analyzed that this indicates that Chinese residents’ consumption continues to remain sluggish. People have less money in their pockets, significant losses in their weighty property wealth, and a lack of sufficient security in society. Expectations for future wages and income have reached a historic low. In this context, no matter how much the authorities promote consumption, they still cannot stimulate consumers.
The real estate market is still undergoing adjustments. According to data from the National Bureau of Statistics of China, nationwide sales of residential properties decreased by 12.6% year-on-year in 2025, indicating that the market is still in a downward phase.
In August 2024, the Central Plains Price Index and the second-hand housing price index for first-tier cities in July of the same year published by Wind showed that second-hand housing prices in first-tier cities have basically fallen back to the price range of 2016.
Huihu said that by 2024, some housing prices in first-tier cities had fallen back to levels from ten years ago. He believes that those who still choose to buy houses in 2026 are essentially gambling that they won’t become “cannon fodder” in a market downturn. He predicts that by 2027, Beijing house prices may still drop by another 10% to 15%.
Amid market adjustments, many homeowners need to significantly reduce prices to complete transactions. Weibo influencer “Master Mei” stated on March 15 that his cousin’s house in the Wanli community in Shanghai, which was listed for more than two years, finally signed a contract after reducing the price by over 2 million yuan.
He mentioned that his cousin and his wife used to work in foreign companies in Shanghai. Around 2017, the couple resigned from their Shanghai jobs and obtained work visas for Australia.
Master Mei shared that his cousin’s house was initially listed at 7.8 million yuan and was sold for 5.7 million yuan. The price difference between 7.8 million and 5.7 million was quite significant. After the transaction, both the buyer and the seller each bore their respective costs, and in the end, his cousin received a little over 5.5 million yuan.
He also pointed out that he and his cousin bought their respective houses at the same time, with similar sizes and locations. He sold his house in 2022 for 7.5 million yuan, while his cousin could only sell his house for 5.7 million yuan after three and a half years.