On January 19th, the National Bureau of Statistics released the full-year economic data for 2025. The data shows that in 2025, the sales area of newly built commercial housing was 881.01 million square meters, a decrease of 8.7% compared to the previous year; within this, residential sales area fell by 9.2%.

At the "2026 China Real Estate Finance Forum" hosted by the Shanghai Advanced Institute of Finance, Lian Ping, President and Chief Economist of Guangkai Chief Industry Research Institute, stated in an interview that the real estate finance sector is currently in a phase of deep structural adjustment, offering an in-depth analysis of the key bottlenecks to market recovery and potential paths forward.

"A rebound in the real estate market first requires transactions; only when demand is unleashed can it drive more mortgage loans, thereby improving the operating conditions of real estate companies," Lian Ping pointed out.

In his view, the real "key" to the current market recovery lies in rebuilding market confidence and reconstructing the logic of value.

In the past, traditional indirect financing methods such as residential mortgages and developer loans were the main supports of real estate finance. However, with continuous market demand contraction and declining transactions, this model has become unsustainable. "Developer loans previously accounted for about 6% to 7% of bank credit; this has now fallen to around 5%. This one to two percentage point change may seem small, but its impact is profound," Lian Ping emphasized.

Against this backdrop, the "whitelist" project has become a key measure to stabilize the industry's fundamental situation. Data shows that by the end of 2025, the approved loan amount for national "whitelist" projects had exceeded 7 trillion yuan, cumulatively supporting the construction and delivery of nearly 20 million housing units.

Analyzing this, Lian Ping said: "'Whitelist' projects have indeed stabilized the basic financing situation for developers, but to truly reverse the current state of real estate finance, it is still necessary to further unleash effective demand."

It is noteworthy that the current market does not lack demand; what is more alarming than the declining data is the widespread wait-and-see sentiment.

"There is demand, but people dare not buy," Lian Ping incisively identified the core bottleneck in the current property market.

Currently, both buyers and sellers are waiting for a clear signal: has housing prices truly bottomed out, and is there a possibility of moderate price increases in the future?

He emphasized that once first-tier cities show price stabilization supported by transaction volumes, it will quickly activate the psychological expectation of "buying on the rise, not the fall," thereby leading the national market towards finding a bottom.

"To transform the wait-and-see state into actual action, the key lies in releasing positive market signals," Lian Ping stated, "and first-tier cities are precisely the key to releasing this signal. If housing prices in first-tier cities rise, potential homebuyers currently holding funds on the sidelines will enter the market in large numbers, subsequently activating market vitality. Sustained expansion of transactions and moderate price increases represent the most ideal state for the real estate market in the current and upcoming period."

Subsequently, Lian Ping compared China's current real estate market situation with the long-term depression following the burst of Japan's real estate bubble. He pointed out that Japan's urbanization rate had already exceeded 80% at that time, while China's permanent resident urbanization rate is currently about 60%. In the future, as urbanization levels continue to rise in high-tech industrial clusters like the Yangtze River Delta, Guangdong-Hong Kong-Macao, and Chengdu-Chongqing, it will generate genuine and sustainable housing demand.

The current state of the real estate industry also reflects the current consumption willingness of residents.

Data shows that the resident consumer price index (CPI) for the full year of 2025 remained flat compared to the previous year, while the core CPI rose by 0.7% for the year, an increase 0.2 percentage points wider than the previous year. However, the financial statistics report for the first three quarters of 2025 released by the People's Bank of China showed that RMB deposits increased by 22.71 trillion yuan in the first three quarters, of which household deposits increased by 12.73 trillion yuan.

Currently, the household savings rate remains at a relatively high level, and consumption willingness is weak, reflecting issues of insufficient expectations for per capita income and property income among residents.

"To boost consumption, both the willingness and the ability to consume are indispensable," Lian Ping analyzed, "and the key to enhancing these two factors lies in increasing residents' income. The recently held Central Economic Work Conference explicitly proposed implementing a resident income increase plan, which may cover all urban and rural residents through a coordinated institutional system involving primary and secondary distribution."

Discussing the role of income growth in promoting consumption, Lian Ping particularly emphasized that the propensity to consume from growth in property income (such as stock gains) is relatively stronger. He explained: "Property income is 'unexpected'; residents have weaker psychological constraints when disposing of this type of income, leading to a higher marginal propensity to consume. Therefore, compared to wage or operational income, growth in property income typically has a more significant promoting and driving effect on consumption."

Looking ahead to 2026, Lian Ping summarized China's economic trends with three phrases: "investment rising, consumption increasing, exports stabilizing."

He predicts that infrastructure investment will rebound significantly, driven by the concentrated release of backlogged projects and the accelerated allocation of fiscal funds; consumption is expected to accelerate its recovery with the help of income support policies and service sector subsidies; although exports face geopolitical disturbances, exports of mechanical and electrical products and capital goods to emerging markets remain resilient.