🏠 China's Housing Market: From Boom to Reset

After two decades of relentless growth, China's residential property market is undergoing a painful correction. Home prices in major cities have fallen 20–30% from their 2021 peaks, and developers like Evergrande and Country Garden — once symbols of China's urban boom — have defaulted on hundreds of billions in debt.

The crisis traces back to Beijing's 'three red lines' policy (2020), which capped developer borrowing ratios to deflate a debt bubble. The move worked — but triggered a confidence collapse. Buyers stopped purchasing unfinished units, developers ran out of cash to complete projects, and a vicious cycle set in.

The government has since reversed course: cutting mortgage rates, relaxing purchase restrictions in major cities, and setting up a state fund to buy unsold inventory. Stabilization is beginning in tier-1 cities like Shanghai and Beijing, but smaller cities with chronic oversupply remain under pressure.

For ordinary Chinese families — who hold 70–80% of their wealth in real estate — the downturn is not just an economic story. It is reshaping consumer confidence, household savings behaviour, and China's long-term growth model.

On Chinese social media such as WeChat, a growing chorus of voices — including some economists — are drawing comparisons to Japan's property collapse of the early 1990s, which ushered in three 'lost decades' of stagnation. Whether China can avoid a similar fate remains one of the most debated questions in global economics today.