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China’s Housing Crisis Deepens
China's real estate sector, once a cornerstone of its rapid economic growth, is now facing a significant downturn that poses challenges to the nation's financial stability and future development.
May 5, 2025
In April 2025, the average price of resale homes across 100 Chinese cities dropped by 0.7% month-on-month, marking a 7.2% decline year-on-year. This trend reflects an increase in property listings and intensified competition among sellers, leading to widespread price cuts.
The housing sector's contribution to China's GDP has decreased from approximately 24% to 19% in recent years. This decline has affected household wealth and consumer confidence, as a significant portion of Chinese household assets are tied to real estate.
Citizens are expressing frustration over stalled property developments and the government's handling of the situation. In response, Chinese authorities have intensified efforts to suppress information about these demonstrations, employing a combination of censorship and increased security measures.
Protest in front of China's National Bank
The crisis began when numerous homebuyers, disillusioned by developers' failure to complete housing projects, initiated mortgage boycotts. These protests, unprecedented in scale, have spread to over 100 cities, affecting more than 320 projects. Organized primarily through social media platforms, these boycotts represent a significant challenge to the government's authority.
In an attempt to quell the unrest, Chinese censors have been actively filtering or erasing details of the mortgage protests from online platforms. This includes deleting posts, blocking hashtags, and restricting discussions related to the boycotts. Such actions aim to prevent the spread of dissent and maintain social stability.
Beyond digital censorship, the government has ramped up physical security measures. Paramilitary troops have been deployed to sensitive areas, and surveillance has been increased to monitor and deter potential protests. These steps underscore the authorities' commitment to suppressing any form of collective action that could threaten the existing political order.
The combination of economic hardship and strict censorship has led to a growing sense of disillusionment among the Chinese populace. As the housing crisis continues without a clear resolution, the government's efforts to suppress information and dissent may further erode public trust and exacerbate social tensions.
In response to the crisis, the Chinese government has implemented measures to stabilize the market, including the adoption of the Private Economy Promotion Law to bolster private sector confidence. Additionally, authorities are considering establishing a "bad bank" to address the issue of unsold homes, with estimates suggesting the residential inventory could reach 93 trillion yuan ($13 trillion) if all current construction projects are completed.
Analysts at U.S.-based investment bank Goldman Sachs estimated that at least 16 million jobs, across industries, in China are at risk due to U.S. President Donald Trump’s imposition of a 145% tariff on Chinese imports.
They expect the Trump administration’s tariff increases will “significantly weigh on the Chinese economy,” with slower economic growth likely to put further pressure on the country’s labor market, particularly in export-related sectors.
Last week, on April 24, hundreds of workers of Guangxin Sports Goods in Dao county went on strike after the company’s factory was shut down without paying employees their compensation or their social security benefits.
He noted, however, that worker protests are not a new phenomenon, with these increasing after the pandemic as China’s economic environment deteriorated.
According to the U.S.-based nonprofit Freedom House’s China Dissent Monitor, the majority of protests tracked in China during the third quarter of 2024 were led by workers, who accounted for 41% of in-person and online dissent events in the country.
About three-quarters of all protests recorded in China were linked to economic grievances, including workers demanding unpaid wages, homeowners facing stalled housing projects, and rural conflict related to land confiscation, Freedom House said.
While these measures aim to mitigate the crisis, analysts warn that broad-based stabilization of the real estate sector is not expected in 2025. The ongoing challenges in the property market, coupled with other economic pressures, suggest a cautious outlook for China's economy in the near term.