Chinese data shows momentum fading into the final stretch of the year – ING Think

Analysis of China’s Property Market Downturn and its Implications for Sustainable Development Goals

Economic Performance and Alignment with SDG 8

Recent data indicates a significant downturn in China’s property sector, posing a direct challenge to the achievement of Sustainable Development Goal 8: Decent Work and Economic Growth. The sector’s performance is a critical component of national economic stability and sustainable growth models.

• Property investment has contracted sharply, registering a 14.7% year-on-year decline year-to-date, acting as a major drag on the overall economy.
• This decline hinders the nation’s strategic transition towards a consumption-driven growth model, a key tenet of sustainable economic development.
• The accelerating price declines in the housing market reflect systemic instability that undermines broad-based economic progress and job security in related industries.

Impact on Household Wealth and Social Equity (SDG 1 & SDG 10)

The erosion of property values has severe consequences for social equity, directly impacting SDG 1: No Poverty and SDG 10: Reduced Inequalities. Housing represents a primary store of wealth for a majority of households, and its devaluation threatens to reverse progress in poverty reduction and exacerbate wealth disparities.

1. New Home Prices: Prices fell by 0.45% month-on-month, the most significant drop since October 2024. From their peak, prices are down 11.8%.
2. Used Home Prices: Prices declined by 0.66% month-on-month, the steepest fall since September 2024. The cumulative decline from the peak has reached 20.3%.
3. Widespread Impact: In the secondary market, 45 of the 70 monitored cities have experienced price drops between 20% and 30% from their peak, while 3 cities have seen declines of over 30%. This massive destruction of household wealth disproportionately affects middle and lower-income families.

Challenges for Sustainable Cities and Communities (SDG 11)

The current market instability presents a formidable obstacle to SDG 11: Sustainable Cities and Communities, which aims to ensure access to adequate, safe, and affordable housing. A market characterized by rapid price declines and high inventory levels undermines the stability required for sustainable urban planning and development.

• In the primary market, only 6 of 70 cities recorded stable or increasing prices, the lowest proportion since September 2024.
• In the secondary market, for the second consecutive month, not a single city reported stable or rising price levels.
• This lack of market confidence discourages new, sustainable construction and can lead to urban decay, jeopardizing the goal of creating inclusive and resilient cities. Further policy support is imperative to stabilize the market and safeguard progress toward national and global sustainability targets.

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 1: No Poverty
   • The article highlights the “massive destruction of household wealth” due to falling property prices. For many families, property is their primary asset, and a significant decline in its value can increase financial vulnerability and push them closer to poverty.
2. SDG 8: Decent Work and Economic Growth
   • The text explicitly states that the property sector is a major “drag on the economy.” The sharp decline in “property investment,” which is down “-14.7% YoY ytd,” directly impacts national economic growth. This slowdown can affect employment in construction and related sectors. The article also touches upon economic strategy by mentioning the need to “transition toward a consumption-driven growth model.”
3. SDG 11: Sustainable Cities and Communities
   • The article’s entire focus is on the urban property market, specifically analyzing “70 city property prices.” A stable and accessible housing market is a cornerstone of a sustainable city. The extreme price volatility and steep declines described (“used home prices are down -20.3%” from the peak) threaten the stability of urban communities and the financial security of their inhabitants.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to… economic… shocks and disasters.
   • The property market downturn described is a significant economic shock. The article’s call for “more policy support” is aimed at mitigating the impact of this shock on households, which directly aligns with building economic resilience.
2. Target 8.1: Sustain per capita economic growth in accordance with national circumstances.
   • The article’s concern that property investment is a “drag on the economy” directly relates to this target. The reported “-14.7% YoY ytd” decline in property investment is a negative contributor to the overall economic growth rate.
3. Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing.
   • While the article discusses falling prices, the underlying issue is market instability. A volatile market with “massive destruction of household wealth” undermines the concept of housing as a secure and adequate asset, which is a prerequisite for achieving this target. The data on price declines across 70 cities speaks to a systemic issue affecting urban housing.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Housing Price Index / Change in Property Value
   • The article provides precise data points that are used to construct housing price indices. These include: “New home prices fell by -0.45% month-on-month,” “Used home prices fell by -0.66% MoM,” and cumulative declines from the peak (“new home prices are now down -11.8%, while used home prices are down -20.3%”). These figures directly measure the stability and value of housing assets, which is relevant to SDG 1 and SDG 11.
2. Growth Rate of Investment
   • The article mentions that “property investment remains one of the biggest drags on the economy, with property investment now down -14.7% YoY ytd.” This figure is a direct indicator of economic activity and a component of GDP, making it a relevant metric for measuring progress towards SDG 8 (Economic Growth).

Summary Table

Source: think.ing.com