UBS Projects Increase in Negative Equity Residential Units in Mainland China to 3.3 Million by 2027, Resulting in RMB232 Billion in Bank Loan Losses | Intellectia.AI
UBS Projects Increase in Negative Equity Residential Units in Mainland China to 3.3 Million by 2027, Resulting in RMB232 Billion in Bank Loan Losses
Written by Emily J. Thompson, Senior Investment Analyst
Property Price Decline: Mainland China's ongoing decline in property prices raises concerns about mortgage defaults and SME loans, with UBS predicting a significant increase in negative equity properties from 700,000 in 2025 to 3.3 million by 2027.
Impact on New Home Sales: The proportion of new home sales affected by negative equity is expected to rise to 28% in 2026 and 55% in 2027, leading to a projected net loss on mortgage loans increasing from RMB34 billion in 2025 to RMB232 billion in 2027.
Bank Provisions: UBS estimates that large state-owned banks will need to provision an additional 2.6% of their projected profit over the next two years due to rising negative equity, while joint-stock banks will require 1.4%.
Bank Performance Variability: Among banks, PSBC is expected to be most impacted by these changes, while HUAXIA BANK is anticipated to be least affected.
Wall Street analysts forecast 01658 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 01658 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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Wall Street analysts forecast 01658 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 01658 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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Current: 5.140
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Current: 5.140
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
