As China’s decade-long property market boom cools, the focus is shifting to revitalizing aging cities. By positioning urban renewal as a key strategy to stimulate domestic demand, Beijing is calibrating growth drivers while addressing deep-seated social needs, experts and executives said. Investment aimed at breathing new life into dilapidated residential areas, obsolete industrial sites, and underutilized public spaces will translate into substantial demand for various industries, increased value of existing assets, and a notable upgrade for the urban environment, they added. China's top leadership has elevated urban renewal to a systematic growth pillar during high-level meetings, prioritizing maximizing the use of existing facilities over large-scale expansion.
President Xi Jinping highlighted that China’s urbanization is evolving from rapid growth to stable development, and urban development is shifting from a stage of large-scale expansion to one focused on improving the quality and efficiency of existing urban areas, during the Central Urban Work Conference in mid-July. Over the past few decades, China has experienced the largest and fastest urbanization process in human history. According to the National Bureau of Statistics (NBS), the urbanization rate reached 67% last year. The Ministry of Housing and Urban-Rural Development pledged in December to try to complete the renovation of aging urban residential communities built before the end of 2000 by the year 2025.
“By 2030, over 10 billion square meters of residential buildings will be more than 30 years old, and even if we only renovate 10% of that each year, that’s still 1 billion square meters,” said Zhao Yanjing, Professor specialized in urban economics at Xiamen University. To put this into perspective, the total new construction area nationwide last year was less than 740 million square meters, and even at the peak in 2019, it stood at some 1.67 billion square meters. Even at such a pace, the aging residential buildings would require at least a decade to address, by which time even more properties will come to the stage where reconditioning work is needed, Zhao said.
“This means that as the real estate market shifts from a focus on constructing new houses to enhancing existing ones, the overall market size will likely be fairly large,” Zhao said. “These renewal projects will generate substantial economic activity, helping to offset the slowdown in the real estate market, while also improving the living conditions of our citizens.” From 2019 to 2024, China renovated 280,000 aging residential communities, benefiting more than 120 million people. China’s urban renewal initiatives have moved beyond the mere renovation of old residential communities. Abandoned factories become innovation hubs; dormant warehouses are transformed into cultural venues; and urban villages are retrofitted into affordable housing zones. “As the country moves away from a growth model centered on new construction, the ability to extract value from our existing facilities will become increasingly important,” said Yang Baojun, President of the Urban Planning Society of China and former Chief Economist of the Ministry of Housing and Urban-Rural Development, the China Daily reports.
The South China Morning Post adds that nationwide primary property sales are expected to fall 8% in 2025 and between 6% to 7% in 2026, according to Edward Chan, Director at S&P Global Ratings. This will continue to put pressure on Chinese developers, many of which are going through the challenge of delivering homes, while maintaining operations to meet their debt obligations.
