As sales continue to plummet – with ghost neighborhoods, desperate people seeing their homes devalued and up to three properties sold for the price of one – Beijing is restricting independent reporting on real estate figures. This censorship “is a sign that he wants to mask the crisis,” say experts.
After two decades of unbridled growth, by 2020 with the real estate bubble In China, housing prices skyrocketed to more than 17 times the average salary.
A perfect storm fueled the real estate boom: the 1998 reforms that led to housing going from being provided by the State to becoming private property, the migration of almost 500 million Chinese from rural areas to cities and abundant credit from state banks.
The construction frenzy transformed China’s landscape, families invested their savings in apartments and real estate speculation became the norm, helping millions of middle-class households feel richer and spend more.
The turning point came during the first wave of closures of public life due to covid-19 in the country, when the Government of the Chinese president, Xi Jinping, It imposed sweeping new rules on the level of debt that real estate developers could take on.
The result of the reforms was brutal. Giants like Evergrande, Country Garden and dozens of smaller companies defaulted, and more than 70 developers went bankrupt or needed state bailouts to survive.
More than five years later, the ensuing crisis shows no signs of abating. According to the British bank Barclays, More than $18 trillion (€15.38 trillion) of household wealth has evaporated as home values plummet.
Meanwhile, construction activity, once a key driver of gross domestic product (GDP), has plummeted so much that it now drags overall growth below Beijing’s targets.
Beijing censors data on private property
As a sign of the delicate nature of the situation, Chinese officials ordered data providers in November 2025 to stop publishing domestic sales figures. That move followed a 42% year-on-year drop in new home sales by the top 100 builders in October, the biggest drop in 18 months, according to China Real Estate Information Corp.
Anne Stevenson-Yang, founder and research director of Taipei-based J Capital Research, thinks That strategy helps mask the true collapse in prices.
“There is likely to be a 50% drop in the markets, which could reach up to 85% before it stabilizes,” he comments.
Stevenson-Yang explains that a promoter offered a colleague in Xi’an city three houses for the price of one, which is equivalent to a two-thirds reduction in the price of each property.
In first-tier cities such as Beijing and Shanghai, average home prices have fallen about 10% from their peak, Oxford Economics reported in September, and declining demand for luxury homes has driven even further declines. However, the worst effect is felt in second- and third-tier cities, such as Chengdu and Dongguan, where values plummeted by up to 30%.
Throughout China, The crisis has left countless half-finished projects, ghost cities and millions of households trapped in negative net worth, which has sparked public anger and sporadic protests as buyers wait for Beijing to intervene with stimulus measures to shore up demand.
“There is still a large excess of supply: between 3 and 5 years of unsold apartments and homes, mainly in smaller cities,” highlights George Magnus, associate researcher at the China Center at the University of Oxford, United Kingdom. “It will take a long time to clear this situation, especially since the group of first-time buyers (aged 20 to 35) is declining.”
After reaching 1.41 billion inhabitants, China’s population is declining, marking the end of decades of growth.
Slowdown of the real estate sector in China
The real estate sector once accounted for up to 25% of China’s GDP, driving double-digit growth in the 2000s and early 2010s. Its collapse has reduced growth by around 5%, impacting steel, cement, employment and investment.
China, previously the main consumer of iron ore, copper and construction materials, now buy less, harming exporters such as Australia, Brazil and Chile. The decline also weakens household spending, reducing imports of luxury goods and cars.
Beijing wants to avoid another bubble, so current support for the real estate industry is much less than in previous crises such as 2008 or the pandemic.
Large-scale stimulus would require huge sums and carry the risk of inflation, Stevenson-Yang notes. Still, Beijing could subsidize mortgage interest, reduce transaction fees and offer greater tax rebates to borrowers.
Real estate crashes usually last five years: the US crash from 2007 to 2012 and Spain’s post-2008 collapse followed that pattern. Japan’s crisis was much longer: home values were stagnant for more than a decade.
Analysts expect China’s recession to persist into the late 2020s, while some predict a recovery in 2027.
