China’s Housing Slump Shows Signs of Bottoming Out. We’ve Been Here Before.

May 21, 2026 - 11:25

Property prices in Shanghai are showing signs of a rebound, offering a glimmer of hope in a market that has been in a deep slump for years. However, the broader national picture remains troubled. Analysts point to a staggering overhang of roughly 90 million empty or unfinished apartments across the country, a supply glut that continues to weigh on prices and developer balance sheets.

The recent uptick in Shanghai is driven by a wave of government stimulus measures, including relaxed purchase restrictions and lower mortgage rates. But skeptics warn that this is not the first time the market has appeared to stabilize. Previous rallies in 2015 and 2018 were followed by renewed downturns, as underlying structural problems were never fully addressed. The current inventory level is historically high, and demand from younger buyers is shrinking due to a declining population and a weak job market.

While some cities may have reached a temporary floor, the national recovery is uneven. Smaller cities and rural areas are still seeing price drops, and many developers remain on the brink of default. The question is not whether the market has bottomed out, but how long it can stay there before another leg down. For now, the Shanghai bounce offers a fragile sign of life, but the country's housing crisis is far from over.