Chinese Property Slump

Extracted Attributes

• Start Year

  2021

• Primary Cause

  Evergrande Group default, overbuilding, new government regulations on developer debt limits

• Demographic Factors

  Population decline, urbanization plateau (65%), accelerating aging (projected >30% by 2035), high primary housing inventory (600 million square meters), idle housing (2 billion square meters), per capita living space (50 square meters)

• Economic Consequences

  Weak domestic demand, severe deflation, overcapacity, foreign investment fleeing

• Evergrande Debt (early 2024)

  2 trillion RMB (310 billion USD)

• Retail Sales Growth Slowdown

  3.7%

• Economic Contribution of Sector

  Nearly one-third of China's GDP

• Industrial Production Growth Slowdown

  5.7%

• Second-hand Housing Price Decline Duration

  41 consecutive months (over 3 years)

• Property Investment Decline (first 7 months)

  12% (outside pandemic period)

Timeline

• The Chinese property sector crisis begins, sparked by the default of Evergrande Group. (Source: Wikipedia, provided summary)

  2021

• Evergrande's financial distress becomes public, leading to a plunge in its shares, impacting global markets and slowing foreign investment in China. (Source: Wikipedia, provided summary)

  2021-08

• Evergrande defaults on an offshore bond. (Source: Wikipedia, provided summary)

  2021-12

• Fitch declares Evergrande to be in 'restricted default'. (Source: Wikipedia, provided summary)

  2021-12

• By early 2024, Evergrande owes approximately 2 trillion RMB (310 billion USD) to investors, banks, and suppliers. (Source: provided summary, Wikipedia)

  2024-01

• A Hong Kong court orders Evergrande to be liquidated. (Source: Wikipedia, provided summary)

  2024-01-29

• Second-hand housing prices in China's major cities fall for 41 consecutive months (over 3 years). (Source: web search results)

  Ongoing

• Property investment falls at the fastest rate outside the pandemic period, declining 12% in the first seven months of the year. (Source: web search results)

  Ongoing

• Weak housing activity spills into retail sales (growth slowing to 3.7%) and industrial production (growth slowing to 5.7%). (Source: web search results)

  Ongoing

Chinese property sector crisis (2020–present)

The Chinese property sector crisis is a financial crisis sparked by the 2021 default of Evergrande Group. Evergrande along with other Chinese property developers, experienced financial stress in the wake of overbuilding and subsequent new Chinese regulations on these companies' debt limits. The crisis spread beyond Evergrande in 2021 to such major property developers as Country Garden, Kaisa Group, Fantasia Holdings, Sunac, Sinic Holdings, and Modern Land. Following widespread online sharing of a letter in August 2021, in which Evergrande warned the Guangdong government that it was at risk of experiencing a cash crunch, shares plunged, impacting global markets and leading to a slowdown of foreign investment in China. The company unsuccessfully attempted to sell assets to generate money, missed several debt payments, was downgraded by international ratings agencies and finally defaulted on an offshore bond at the beginning of December 2021. The ratings agency Fitch declared the company to be in "restricted default". At the beginning of the 2020s, thousands of retail investors, as well as banks, suppliers, and foreign investors were owed 2 trillion RMB (310 billion USD) by Evergrande alone. On 29 January 2024, a Hong Kong court ordered Evergrande to be liquidated.

Web Search Results

• China's Property Slump Is Taking the Whole Economy Down - StoneX

  # Aug 15, 2025 8/15/2025 11:53:00 AM # China’s Property Slump Is Taking the Whole Economy Down David Scutt, FOREX.com APAC Market Analyst, explains how China’s property downturn is weighing on the broader economy and why policy measures may struggle to reverse it. ## Key Takeaways Property investment fell at the fastest rate outside the pandemic period Weak housing activity is spilling into retail sales and manufacturing Recent policy measures may not be enough to restore confidence [...] Scutt outlines how China’s economy is losing momentum, led by a sharp slowdown in the property sector. Fixed asset investment rose just 1.6% in the first seven months of the year, dragged down by a 12% drop in property investment, with sales, construction starts, and home prices all declining. The weakness is spilling into consumption and manufacturing, with retail sales growth slowing to 3.7% and industrial production to 5.7%, alongside falling manufacturing prices. [...] The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this

• Can easing of property curbs in 3 big cities help give Chinese ...

  Those efforts in the three first-tier cities, dubbed by some as the last line of defence for China’s real estate market, might result in short-term rebounds in limited regions, said Lian Ping, director general of the China Chief Economists Forum, but there was no end in sight for the wider slump in the country’s economically important property sector. [...] China property EconomyChina Economy # Can easing of property curbs in 3 big cities help give Chinese consumption a boost? Analysts say real estate slump is still weighing heavily on household wealth and consumer confidence Reading Time:3 minutes Why you can trust SCMP 4 Mandy Zuoin Shanghai

• Experts Warn of 'Bottomless Pit' Collapse in China's Housing Market ...

  According to the latest September data, second-hand housing prices in China’s major cities continue to fall: Beijing, Shanghai, and Shenzhen dropped by 0.6 percent, 0.48 percent, and 0.5 percent respectively, while Guangzhou plunged 0.97 percent after restrictions were fully lifted. Zhu emphasized that this is not an isolated incident; second-hand prices have fallen for 41 consecutive months, uninterrupted for more than three years. Nationwide, the second-hand market is lifeless, with both [...] 66 percent, per capita housing area reaching 43 square meters, and a rapidly aging population—all factors making China’s property market a “game of hot potato” with no one willing to play. Economist Xu Chenggang also warned that China’s economy is sinking into severe deflation, weak domestic demand, and overcapacity, with foreign investment fleeing and a full-blown crisis looming. [...] Economist Zhu Ming identifies ten indicators signaling that China’s real estate market has reached a turning point: 1. Population decline, with 1.4 billion as a ceiling. 2. Urbanization at 65 percent, leaving limited growth potential. 3. Accelerating aging, projected to exceed 30 percent by 2035. 4. Primary housing inventory at 600 million square meters, with 2 billion square meters idle. 5. Per capita living space at 50 square meters, reaching a plateau.

• Understanding China's Real Estate Crisis - The Global Treasurer

  ## The Catalysts of the Current Housing Market Downturn There are several factors that have led to the downturn in China’s housing market. Firstly, potential homebuyers are increasingly pessimistic about job security and future earnings, with a survey indicating a sharp decline in the intent to purchase homes in 2024. [...] Secondly, the market is rife with caution due to the instability of real estate developers, many of whom are defaulting on project deliveries. This has eroded consumer confidence in the sector. Lastly, China’s demographic challenges, particularly its ageing population, are leading to a natural contraction in demand for new housing. These elements have coalesced into a perfect storm, precipitating a crisis in an industry that once seemed invincible. [...] China’s real estate sector, once a pillar of economic stability and growth, is now facing a crisis of unprecedented scale. The industry, contributing to nearly a third of the nation’s GDP, is witnessing the collapse of its leading giants, Evergrande and Country Garden, amidst a broader market downturn. T his crisis not only threatens domestic economic stability but also poses significant risks to global markets.

• China's Real Estate Challenge - International Monetary Fund (IMF)

  All this points to the difficulties of the transition out of real estate, even without a Western-style financial crisis. Our original 2020 paper, based on aggregate input-output data, calculated that a 20 percent fall in the size of China’s real estate sector would lead to a 5–10 percent fall in output, cumulatively over a number of years, even absent a financial crisis. [...] By the same token, not all China’s tier 3 cities have been experiencing real estate collapses. Some smaller cities, in the south especially, are thriving. A great many others, though, are suffering from an exodus of young people and jobs. [...] Prices in tier 3 cities, which account for 60 percent of China’s GDP, have been falling. It’s quite normal for real estate problems to be concentrated in certain parts of the country. During the US subprime financial crisis, for instance, the problems were acute in only four or five states. However, this still led to a banking crisis that spread across the country.