Goldman Sachs: Four Key Turning Points for China's Real Estate from 2027 to 2035
nashnova research
Goldman Sachs projects four turning points for China's housing market through 2035, based on project-level inventory analysis across 18 cities. The core call: supply shrinks before demand does, supporting price stabilization by 2029 — with Shanghai and Shenzhen's two-year price-gain forecast raised from 15% to 20%.
What are the four turning points?
Goldman maps the 2027–2035 housing trajectory in four steps: 2028 — sharp drop in sellable new-home projects; 2031 — land sales accelerate downward; 2032 — housing starts and property investment bottom out and recover; 2030 — structural demand decline picks up speed.
Three of the four are on the supply side; only the last is demand. This means → supply collapses first, demand follows later — the gap between them is the window for price stabilization.
In plain terms = the houses available for sale thin out before buyers do. Sellers exit the market ahead of buyers, giving prices a floor.
Why does supply shrink first?
Total unsold residential inventory nationwide is roughly 6.5 billion sqm, worth about RMB 44 trillion — but an estimated 34% is "stalled" inventory, unlikely to be fully developed and brought to market due to poor sell-through prospects and liquidity constraints.
After August 2025's shift to completed-home sales — a model where developers can only sell units after delivery, ending pre-sales — the pool of sellable new projects will drop sharply by 2028. Tier-1 cities hit that point a year earlier, in 2027.
This reflects a crucial gap: headline inventory looks enormous, but the stock that can actually reach buyers is far smaller. Effective supply is the real pricing anchor.
What happens to land sales and construction?
Land transaction value across 300 cities will fall from roughly RMB 1.7 trillion in 2026 to RMB 40 billion by 2035. In 2031 and 2032, land sales each drop about 50% year-on-year.
Housing starts will halve by 2031 versus 2026 levels. Property fixed-asset investment will average about RMB 4.7 trillion in 2027–2029 — one-third of the cycle peak.
Demolition-and-rebuild demand — tearing down aging housing and replacing it — is expected to accelerate from 2032, lifting both starts and investment off the bottom. This means → 2032 is the key checkpoint for whether the sector shifts from "shrinking" to "renewing."
What happens on the demand side?
Urbanization and homeownership among registered urban households are approaching 70% and 95% respectively. Structural housing demand will begin declining faster around 2030.
Goldman's updated 2027–2035 total demand forecast is roughly 16% lower than before. Demolition-and-rebuild could help stabilize overall demand at about 800 million sqm per year after 2032.
In plain terms = most urban households already own a home. Fresh first-time demand keeps shrinking; the market's future support comes not from "buying a first home" but from "replacing an old one."
What are the price and sales forecasts?
New-home sales volume will fall 10%, 25%, and 20% year-on-year in 2027–2029; sales value drops more steeply — 12%, 27%, 20%. From 2033, annual declines of 10–20%-plus continue.
New-home prices decline 3% per year in 2027–2028, flatten in 2029–2030, then rise a modest 3% annually from 2030. The secondhand-price turning point lags new homes by about a year.
Secondhand homes' share of total transactions rises from 53% in 2026 to roughly 75% by 2035. This means → the housing market's center of gravity shifts from developers to existing homeowners.
Which stocks does Goldman favor — and which does it avoid?
China Merchants Shekou upgraded from Neutral to Buy; Greentown China downgraded from Buy to Neutral. Buy ratings maintained on COLI, CR Land, and China Jinmao; Sell ratings kept on Seazen and Vanke A/H.
Goldman's stock-picking logic: developers with larger sellable inventory, greater exposure to top-tier cities, and lower leverage are best positioned. Private developers face heightened risk from heavy bond repayment schedules in 2027–2029.
Downside risk: a large-scale capital injection or delays in the new sales model → more sellable supply hits the market. Upside risk: tighter financing or a supply gap wider than expected → stronger price support.
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