Despite challenges such as a complex international environment and challenging internal structural transformation, the Chinese real estate market is expected to be driven upward in 2025 by effective demand, consumption upgrades and technological progress, according to a report.

China's new quality productive forces and improved consumption are anticipated to inject vitality into the economy, making 2025 a year of strength accumulation and energy generation, said the report on the 2025 China real estate market outlook by commercial real estate services and investment firm CBRE published on Tuesday.

Specifically, office demand in major Chinese cities is expected to slightly improve in 2025, with net absorption projected to increase by about 10 percent. Consumption and new quality productive forces will continue to serve as the two major forces in driving demand for office expansion, said the report.

Warehouse demand will remain stable as domestic consumption recovers, while external demand slows. The impact of the 10 percent additional tariffs imposed by the United States on cross-border e-commerce leasing demand will be limited. Tenants' focus on price and quality will continue to influence rents and occupancy in first-tier city clusters.

The central government's measures aimed at boosting consumption nationwide are projected to push up retail sales by 5 percent in 2025, driving retailers to pursue expansion and consolidation, with emotional value and quality consumption emerging as new drivers. Vacancy rates are expected to decline after supply peaks this year.

En-block commercial property transactions in 2025 are expected to improve as asset prices become more attractive and interest rates are further lowered, the report added.