Global Metals & Mining: China Property Starts Lowest in Over Two Decades in '25, However Incremental Declines Less Material to Metal Demand
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A Citi research report highlights that China's property sector continued to contract in December 2025, with commercial floor space sales falling 15.6% year-on-year and new starts declining 19.4%. For the full year, sales dropped 8.7% while new starts plunged 20.4%, bringing the 2025 new starts figure to 587 million square meters, the lowest level in over two decades. Completions also fell 18.1% in 2025.
The persistent gap between sales volume growth and new starts indicates that the market destocking cycle, now lasting over four years, is continuing. However, the spread between sales and start growth rates narrowed from roughly 2,400 basis points in 2024 to approximately 1,300 basis points in 2025, suggesting that the pace of destocking is moderating.
Crucially for the metals sector, real estate now accounts for less than one-fifth of China's total steel demand. Consequently, any further declines in property starts have a diminishing incremental impact on overall metal consumption. The severe weakness in property starts witnessed between the second half of 2022 and late 2025 has already been fully reflected in Chinese steel demand figures from early 2023 through the first half of 2025.
Looking ahead, Citi forecasts a further 7% decline in floor space sales and a 15% drop in new starts for 2026. This would push sales volumes back to 2008 levels and new starts to 2004 levels, with the first quarter traditionally representing a seasonal trough for both metrics.