Recently, a survey report released by the People’s Bank of China (PBOC) has revealed some concerning trends regarding the expectations of housing prices in the fourth quarter of this year. According to the report, only 9.1% of the population nationwide believe that housing prices will rise in the upcoming quarter, marking a significant decrease in positive sentiment compared to previous quarters. The disclosure of this report immediately stirred up a buzz on the internet, although the original report from Sina Finance was promptly taken down.
Covering 50 cities nationwide and surveying 20,000 depositors, the authoritative survey report highlighted the impact of residents’ diminishing optimism towards rising housing prices for the second consecutive quarter, dropping below the 10% threshold. Concurrently, the percentage of those predicting a price decrease surged to 23.5%, more than double the number of those anticipating a rise, which was at 21.7% in the second quarter.
An analysis by blogger “Fanjianshezhang” indicated that the PBOC report signifies a sinking ship in the real estate market, with an increasing number of people clamoring onto lifeboats. Over the past two decades, there has been a widespread belief in China that housing prices only go up. The entrenched mindset of “buy early, enjoy early; buy late, pay more” has permeated into the collective consciousness, pressuring individuals to enter the market as soon as possible or risk losing out.
According to data from the PBOC, from the first quarter of 2019 to the third quarter of 2025, spanning over six years, expectations of housing prices have experienced three significant drops. The first decline occurred from the third quarter of 2019 to the first quarter of 2020 when many cities reached peak prices and government regulations led to a market cooldown.
The second decline began in the second quarter of 2021, where the number of optimistic individuals steadily decreased while the pessimistic outlook rose, culminating in the equalization of both sentiments in the second quarter of 2022. 2021 marked the peak of the real estate market in terms of transaction volume, followed by a sustained decrease in activity.
The current situation represents the third decline, with residents’ expectations of price increases dropping below 10% in the second quarter of 2025. While there was a marginal increase of 0.2% in the third quarter, the rise in pessimistic views outpaced any positive movement. Rather than seeing a restoration of market confidence, the trend continues downward.
The blogger asserts that the longstanding belief in ever-rising housing prices has been shattered. With 90% of the population lacking faith in price increases and even those with resources hesitating to invest in property, the question arises – can housing prices truly ascend?
Moreover, on the supply side, many third and fourth-tier cities are facing housing oversupply. With demand failing to match the surplus, can prices avoid a decline? Adding to the challenge is the waning interest of young individuals in homeownership. Post-90s and post-2000s generations are opting to rent instead of committing to a 30-year mortgage, as they recognize that owning a home entails ongoing liabilities rather than asset accumulation.
The article points out that the dip in price expectations below 10% is not an isolated event but indicative of a broader societal crisis in confidence. This figure may likely continue to decline in the coming years, as rebuilding shattered faith poses a formidable challenge. It’s not about pessimism but acknowledging the reality at hand.
In a reflection by blogger “Dawei Kan Lou Shi,” the data in the PBOC report signals a pivotal moment for the real estate market, transitioning from the fervor of the “everyone buys housing” era to a period where 90% of individuals are skeptical about price increases. This statistical shift not only mirrors market sentiment changes but also underscores a fundamental restructuring of China’s real estate market logic.
Simultaneous surveys reveal that 57.4% of residents perceive a grim employment outlook, with the employment sentiment index decreasing by 2.7% compared to the previous quarter. 62.3% of residents lean towards saving more, while only 19.2% prefer increased consumption.
The findings underscore a worrying trend – the stagnation in housing price expectations and residents’ economic behaviors form a reinforcing cycle. “Home purchase” has dropped out of the top five future expenditure choices for residents for three consecutive quarters, after long-term prominence within the top four until 2022.
According to data from China’s National Bureau of Statistics, in March 2025, the price index of second-hand residential properties in 70 major cities decreased by 0.61% compared to the previous month. The China Index Academy monitoring report indicates that the average price of new homes in 100 cities has witnessed continuous monthly declines for 16 months.
As a leading indicator, the decline in first-tier city housing prices is particularly pronounced: Beijing’s average price for second-hand homes fell by 15.3% compared to the same period in 2024, while Shenzhen experienced a 17.0% decline. In September 2025, a rare phenomenon emerged where none of the top 100 cities nationwide witnessed a rise in second-hand housing prices.
An article by Netease influencer “Huìyǎn kàn shìjiè hāhā” suggests that one of the signals released by the PBOC report is the end of the golden age of blind optimism in the real estate market.
The article cautions individuals: for those in urgent need, do not panic as housing prices will not skyrocket. Priority should be given to selecting properties near metro stations and industrial areas in third and fourth-tier cities, avoiding outlying “dormitory towns.” For those looking to sell, do not delay – especially with surplus properties in non-core areas of third and fourth-tier cities, particularly aging properties without adequate amenities. The longer you wait, the less valuable these properties become.