While the global real estate sector has slowed in the post-pandemic period, China’s market has faced a far more severe adjustment, evolving into a structural property sector crisis. New housing construction has declined sharply, yet this downturn has not translated into a contraction of the Chinese home décor market. On the contrary, the home décor industry has demonstrated notable resilience and continues to present substantial growth opportunities.
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Chinese home décor market growth amidst real estate downturn
In 2025, the Chinese home décor market reached a total size of RMB 4.8 trillion. Furniture accounted for 38% of market value, followed by home appliances at 32%, and soft décoration, such as textiles, curtains, rugs, and decorative item, at 30%. Within this broader market, smart home products have emerged as a key growth engine. Retail sales of smart home solutions exceeded RMB 1.2 trillion in 2025, representing a year-on-year increase of 28%. Sub-segments such as voice-control devices and environmental monitoring systems expanded even more rapidly, with growth rates surpassing 40%.
This sustained expansion, despite a weakening property sector, is driven by three structural forces: demographic aging, policy-led renovation and trade-in programs, and the need for smart home technologies.
The impact of the aging population on home décor
China’s demographic turning point has profound implications for society, government, and business, fueling a rapidly growing “silver economy” that is compelling the Chinese home décor market to transform. As the nation seeks new solutions for elderly care, the industry is pivoting to support an unprecedented aging-in-place population. This shift is deeply rooted in the “9073” elderly care framework, one of the several that Chinese society explored. Under this model, 90% of seniors receive care at home supported by social services, 7% utilize community-based care, and only 3% reside in dedicated institutional care facilities.
This widespread reliance on home-based care has created a surge in demand for specialized home renovations and furniture designed for elderly safety and comfort. Consequently, the market for aging-in-place furniture (适老化家具) has experienced significant growth. According to data from the Ministry of Commerce, the sales volume for elderly-friendly furniture grew by 372.1% between August and December 2023. Furthermore, JD.com user searches for elderly-friendly products doubled in the first half of 2024, with the number of specialized shops increasing by over 130% and related inventory growing by more than 50%.
This market momentum is strongly reinforced by strategic government policies aimed at developing the silver economy and improving elderly well-being. Over the past five years, national authorities have released multiple documents supporting the elderly care industry, specifically highlighting the need for age-appropriate home renovations. Initiatives include joint efforts by the Ministry of Industry and Information Technology to promote the R&D of elderly-friendly products, and directives from the Ministry of Commerce to enhance home suitability. Additionally, the State Council’s 2024 guidelines on developing the silver economy further prioritized aging-in-place renovations, creating a robust policy environment for market expansion.
Policy-driven renovations and market premiumization
Beyond elderly-focused solutions, government policy has also revitalized the broader Chinese home décor market through a nationwide consumer goods trade-in program. This initiative directly responds to structural changes in the Chinese housing market, where declining new-home construction contrasts with sustained activity in the secondary housing segment. In 2025, newly built residential sales area decreased by 9.2%, and total sales value dropped by 13.0%. Conversely, the second-hand housing market has shown remarkable resilience. This trend has continued into 2026, as for January, Beijing’s secondary home transactions sustained over 14,000 units per month for three consecutive months, while Shanghai’s transactions exceeded 22,000 units monthly for the same period. The data show the strong growth and active trading in the Chinese second-hand housing market.
How China’s trade-in program is reshaping home décor demand
This pivot from first-hand to second-hand housing has fundamentally altered consumer behavior, shifting the demand from full-house renovations to targeted furniture replacements and upgrades, which the trade-in program aims to accelerate. Formalized in January 2025, the program converts incremental renovation intent into realized demand by offering substantial rebates: 15% for general purchases, 20% for energy-efficient products, and up to 30% for aging-in-place items. When combined with provincial caps and enterprise co-discounts, consumers can achieve total savings near 40% on eligible kitchen renewals, effectively reducing the friction of high-cost replacements.
Driven by these incentives and the need to modernize existing spaces, a clear trend toward “premiumization” has emerged in the Chinese market. In 2025, premium mid-range products accounted for 47.27% of sales as households balanced function, durability, and modularity at accessible price points. Furthermore, the premium segment is projected to grow at a 3.14% CAGR through 2031, capturing buyers seeking design-led solutions, integrated smart features, and high-quality materials. By channeling demand toward compliant, durable products, the trade-in incentives are successfully driving higher average selling prices and promoting comprehensive service bundles.
Smart home solutions as a core growth engine
Affected by the broader trend of premiumization and rapid technological advancements, the smart home décor segment has become a major engine of growth within the Chinese home décor market. The market has maintained a remarkable 33.15% compound annual growth rate (CAGR) between 2016 and 2025. Retail sales expanded significantly from RMB 62 billion in 2016 to RMB 632.1 billion in 2024, marking a 49.47% increase compared to 2023 and further climbed to RMB 815.4 billion in 2025. The market is expected to exceed RMB 1.8 trillion by 2030. In 2025, smart home penetration in China will have already surpassed 65%.
Aging-in-place meets aesthetics: The new frontier of smart home décor
This rapid expansion is deeply interconnected with the previously discussed shifts in the real estate sector and the government’s consumer subsidy programs. As consumers move away from building new homes toward upgrading existing ones (存量房), the demand for “drop-in” smart solutions has surged. Looking ahead to 2026, products tailored for upgrading existing homes. Specifically for smart locks, lighting systems, and central hubs, which are projected to see year-on-year growth exceeding 20%. Beyond lifestyle convenience, smart home décor is also playing a growing role in supporting aging-in-place. Features such as voice control, smart lighting, and environmental monitoring can materially improve safety and usability for elderly residents when designed appropriately.
Strategic government mandates are accelerating this adoption rate on both new and existing housing fronts. According to directives from the Ministry of Housing and Urban-Rural Development, new residential units must achieve a smart system coverage rate of over 60% starting in 2025. This mandate alone is expected to generate RMB 320 billion in incremental demand within the professionally décorated (精装房) market segment. This confluence of technological innovation, policy incentives, and structural housing changes ensures that smart home solutions remain at the forefront of the premium home décor market.
Structural resilience and the future of the Chinese home décor market
Taken together, the resilience of the Chinese home décor market amid a real estate downturn reflects a fundamental shift in demand drivers. Growth is no longer anchored in new-home construction but increasingly supported by demographic aging, policy-led renovation incentives, and technological upgrading.
Population aging has reshaped home décor from a discretionary, design-oriented category into a necessity-driven market focused on safety, accessibility, and long-term usability. At the same time, the transition from new housing to secondary housing has redirected consumer spending toward targeted renovations and replacement demand, rather than full-house fit-outs. This shift has been further accelerated by the national consumer goods trade-in program, which reduces replacement costs and stimulates renovation activity.
Together, these forces have driven a clear trend toward premiumization, with consumers prioritizing higher-quality, compliant, and functionally integrated products. Smart home solutions sit at the intersection of these dynamics. Their compatibility with existing housing stock, alignment with policy mandates, and ability to enhance functionality and efficiency. This positioned them as a central pillar of growth as the market continues to evolve toward value-driven upgrading.
Building value: The new era of the Chinese home décor market
- The Chinese home décor market has demonstrated remarkable resilience. It successfully decouples from the slump in new real estate construction to find growth in the secondary market.
- A rapidly aging population has shifted market demand toward functional, safety-focused solutions that allow seniors to remain in their homes comfortably.
- Governmental trade-in policies are actively stimulating demand by reducing replacement costs and encouraging consumers to upgrade to higher-quality, compliant products.
- Smart home technology has integrated deeply into the market, serving as a vital component for both modernization and specialized elderly care solutions.
- The industry is successfully transitioning from a volume-driven model based on new development to a value-driven model centered on renovation, premiumization, and technological integration
