Loan data points to stabilizing realty sector

The latest lending data showing a rebound in property-related loans indicates early signs of stabilization in China's real estate market, signaling a gradual recovery in financing activity and a renewed sense of confidence among developers and homebuyers, industry experts said on Thursday.

They said that more supportive measures are expected to be rolled out to restore momentum in the property market while existing policies gradually take effect, which will further boost market confidence and pave the way for overall market stabilization in the coming months.

Data released on Tuesday by the People's Bank of China, the nation's central bank, shows that as of the end of the second quarter of 2025, outstanding renminbi real estate loans amounted to 53.33 trillion yuan ($7.45 trillion), up 0.4 percent year-on-year, an increase of 0.6 percentage point over the end of 2024.

In the first half of the year, real estate loans increased by 416.6 billion yuan, while property development loans rose 292.6 billion yuan, reaching 13.81 trillion yuan, up 0.3 percent year-on-year.

The data also showed that outstanding individual housing loans stood at 37.74 trillion yuan, down 0.1 percent year-on-year, but the decline narrowed by 1.2 percentage points from the end of 2024.

"This is a clear and encouraging sign that the real estate market is gradually stabilizing. Consecutive quarters of positive loan growth suggest that financing is flowing more smoothly again — both for developers and homebuyers," said Shaun Brodie, head of research content for China with Cushman & Wakefield, a global real estate services company.

"It also reflects improving confidence among financial institutions and a more supportive policy environment. These factors collectively indicate that the market is transitioning from a correction phase toward a more balanced and sustainable footing," Brodie said.

Yao Yao, head of research at JLL China, said the growth tendency is more evident in property development loans.

"Although property loan growth is still subdued, it has posted year on-year gains for a second straight quarter, with development loan balances rising even faster. That momentum has been largely echoed by stronger land auction results in core cities since the start of the year, backed by a rising supply of prime land," said Yao.

Ding Zuyu, chairman of China Real Estate Information Corp, said that since June, while the central government has actively worked to boost domestic demand and stimulate consumption, local governments have also continued to strengthen market-stabilizing policies.

"Notable examples are Guangdong province's Shen-zhen and Zhuhai promoting mutual recognition of housing provident fund loans; Hangzhou allowing the use of provident fund savings for down payments; and Binhu district of Jiangsu province's Wuxi launching a "SuChao" (Jiangsu Football City League) ticket stub subsidy program offering up to 50,000 yuan for homebuyers," said Ding.

In the first half of this year, local governments rolled out over 340 measures, primarily focusing on optimizing housing provident fund policies, offering home purchase subsidies and adjusting land supply, according to media reports.

Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute, said that in the first half of 2025, China's real estate market showed positive momentum, reflecting both the effective impact of supportive housing policies and strong underlying demand.

This upward trend has laid a solid foundation for further market recovery in the second half of the year, Yan said, adding that with supply and demand having undergone substantial adjustments, the sector is well-positioned for more balanced and sustainable growth moving forward.