China’s real estate meltdown infographic
Graphic charts month-on-month new house price changes in China.


China’s deepening housing crisis hits middle class

By Ninian Carter

December 18, 2023 - Once the backbone of China’s economy, the value of real estate is tumbling in the wake of President Xi Jinping’s “common prosperity” drive, which aimed to make homes more affordable.

China’s privatisation of property in the 1990s led entrepreneurs to borrow heavily from banks to invest in real estate.

The subsequent boom invigorated local governments, investors and China’s middle class as real estate grew to become a central pillar of China’s economy – worth about $52 trillion in 2019.

In 2021, as part of President Xi Jinping’s “common prosperity” drive, China cracked down on the boom to reduce risk and make homes more affordable.

However, Beijing may have gone too far, with property developers such as County Garden Holdings on the verge of collapse, and fears growing of the contagion spreading to the nation’s financial system.

China’s housing sector value may fall to around 16% of GDP by 2026 from a high around 25% in 2019 – putting about 5 million people at risk of reduced incomes or even unemployment.

PUBLISHED: 18/12/2023; STORY: Graphic News; PICTURES: Getty Images