Property prices in China continue to show pressure as the latest data for 70 major cities recorded a drop to the lowest level in almost two decades.
This development indicates continued weakness in a sector that was previously the backbone of the country's economic growth.
This weakness in the property market directly affects economic growth expectations.
In the prediction market, the forecast for China's GDP in 2026 is now trending below 1.0%, reflecting a change in investor sentiment that is increasingly cautious about the country's economic prospects.
With about 247 days before the final assessment, the long-term structure of the market indicates that this slowdown is not temporary, but has the potential to last until the end of the year.
This is in line with the ongoing pressure in the property sector which is still struggling with oversupply, falling demand, and weak buyer confidence.
The real estate sector plays a major role in China's economy, contributing an estimated 20% to 30% of GDP when taking into account related value chains such as construction, raw materials and financial services.
Therefore, the prolonged price decline has a double impact on economic growth, including reduced construction activity, pressure on financial institutions and a decline in household wealth.
Data from the National Bureau of Statistics of China also previously showed a continued decline in new and secondary house prices, indicating that the recovery of the sector is still far from stable.
At the same time, several major real estate developers continue to face cash flow problems and high debt, thus adding to systemic risks to the domestic economy.
From a financial market perspective, despite the clearly negative sentiment, actual trading volume in the prediction market using stablecoins such as USD Coin remains low. The lack of strong liquidity indicates that institutional investor confidence has not yet fully formed.
This situation makes the market vulnerable to small-scale trading. Thin order books allow for significant price movements even with limited trading volume, thus increasing the risk of volatility that does not reflect real economic fundamentals.
At the same time, structural challenges to China’s economy are becoming increasingly apparent. Weak domestic demand, high youth unemployment and deflationary pressures are adding to the burden on recovery efforts.
While authorities including the People’s Bank of China have implemented a number of stimulus measures such as monetary easing and support for the property sector, the impact has been limited so far.
The combination of these factors reinforces the view that China’s economy is in a longer adjustment phase. As long as the property sector fails to show a sustained recovery, growth prospects remain vulnerable to downside risks, with major implications for the global economy given China’s role as a key engine of global growth.
