Chinese citizens left in lurch amid crash in home prices: Report

New Delhi: China’s leadership appears to be ignoring the crash in the country’s real estate market which has eroded the wealth of the ordinary citizens. This was quite evident as China’s President Xi Jinping during a recent visit to Shanghai did not even mention the bust in the property market while addressing the people, according to an article in The Diplomat.

“China’s property bust, which came so soon after home ownership was reinstated in the 1990s, is a tragedy for the hundreds of millions of Chinese buyers who have either lost their homes, or who are so far underwater with the loans that neither re-financing nor selling the property is a possibility. The decline of this prime economic mover is a risk to the financial health of ordinary citizens,” the article states.

It also highlights that German news broadcaster Deutsche Welle (DW) reported after the massive 42 per cent year-on-year drop in new home sales by the top 100 builders in October, 2025 estimated by China Real Estate Information, Chinese officials have told private data providers to stop publishing home sales figures.

The problem has only got worse as The New York Times reported in May that although “property prices in Shanghai, in particular, are rebounding, the national market still faces an enormous overhang – 90 million empty or unfinished apartments, the article pointed out.

It also highlights that of all of China’s domestic priorities, home ownership and property investment has been both a boon and a bane. Professor of Economics Kenneth Rogoff of Harvard University, in the Brookings Podcast on Economic Activity, stated in April that “real estate has been the cornerstone of the Chinese growth model, and if you include infrastructure which is closely related, it accounts for roughly a third of demand in China over a very long period".

It has been the engine along with exports of China’s growth. Rogoff stressed that “the collapse in housing prices is a huge collapse in wealth, because Chinese citizens hold over 70 per cent of their wealth in housing… the first order problem is that people feel a lot poorer and cut back their consumption accordingly,” the article states.