China Expands Property Support as Developer Losses and Mortgage Risks Persist

China's property market has remained in a downward spiral for five years, according to Bloomberg News. Real estate values have continued to decline, forcing financially distressed households to sell assets and leaving heavily indebted apartment developers on the verge of collapse.

Official measures aimed at stabilizing the sector have faced steep headwinds. Government-linked developer China Vanke Co. reported a record annual loss of 89 billion yuan ($13 billion) last year, bringing its cumulative losses over the past two fiscal years to more than 130 billion yuan. The results followed the delisting of China Evergrande Group from the Hong Kong stock exchange in August 2025, which rendered its equity effectively worthless.

In response to persistent market weakness, Chinese authorities have rolled out additional policy interventions. These include mortgage subsidies intended to ease financial burdens for lower-income households, reduced borrowing costs on existing mortgages, lowered transaction taxes, and relaxed property purchase restrictions for non-residents in major cities.

The ongoing property slump has intensified concerns over systemic financial risk, Bloomberg reported. Falling residential valuations have pushed millions of home loans underwater, creating heightened default and credit loss exposures for domestic lenders.