Chinese real estate is faltering, and with it one of the pillars of global growth. Far from a brutal shock, the fall has been taking place for several years, gradually eating away at the value of the market and the confidence of players. Behind this slow deterioration lies a deep crisis, which goes beyond the simple real estate sector to affect the economy and society as a whole.
In brief
- China's real estate market has fallen 25% in four years, reaching a historic low after a long period of gradual slowdown.
- Key indicators are turning red, with a drop in investment, declining sales and an explosion of unsold homes.
- The real estate giants are faltering, between bankruptcies, payment defaults and record losses, revealing a deep crisis in the sector.
- Government support measures are failing to reverse the trend, fueling distrust among banks and buyers.
A real estate market in continuous decline for four years
The correction in the Chinese real estate market is reaching a scale rarely seen. According to data from the Bank for International Settlements, the inflation-adjusted residential property price index stood at 86.79 in the fourth quarter of 2025, compared to a peak of 113 at the end of 2021, an actual decline of 25%.
This graph is not a projection. It describes a current reality, confirming that contraction is already underway. Far from a brutal shock, the dynamic takes place over time and is similar to “a progressive collapse which has now lasted for four consecutive years”.
The main indicators translate this progressive degradation:
- -23% real drop in property prices since 2021;
- -14.7% decline in real estate investment over the first ten months of 2025;
- 5 consecutive years of negative growth for new home sales;
- 391 million m² of unsold housing, an increase of 72% since 2021.
This persistent imbalance between supply and demand reveals a structural crisis, marked by a lasting slowdown in activity and a massive accumulation of unsold goods.
A crisis that extends to the financial and social system
Beyond prices, the crisis manifests itself in the collapse of major developers. Evergrande, once the industry leader, collapsed under debt exceeding $300 billion and was delisted from the Hong Kong stock exchange in August 2025.
Country Garden was also lacking. Most significantly, Vanke, seen as a state-backed stable player, announced a record annual loss of $6.8 billion in 2024 and is now seeking bond repayment extensions, becoming the first state-backed developer to consider restructuring. These events illustrate a crisis that goes beyond private actors to affect the very foundations of the sector.
Faced with this situation, the Chinese authorities have increased support measures: rate cuts, purchase subsidies, establishment of a 300 billion yuan mechanism to absorb unsold housing, as well as direct interventions. Despite this, “none of these measures have made it possible to reverse the trend”. Banks remain cautious in extending credit, local governments are hesitant to act, and buyer confidence has deteriorated sharply, to the point where recovery could take several years.
The scope of this crisis now goes beyond the economic framework. The real estate sector and its related activities accounted for around 25% of China's GDP, while a large proportion of households held the bulk of their wealth in stone. The rapid devaluation of these assets, combined with the absence of widely accessible investment alternatives, is permanently weakening household wealth.
In a context of declining real estate confidence, bitcoin appears as a potential alternative, offering liquidity and independence in the face of a declining local market and limited investment options.
In a country where economic growth has long served as a basis for social stability, such a contraction raises the question of future balance. The Chinese real estate market is no longer just going through a correction phase, but it is testing the limits of an economic model built on continuous expansion. Can Beijing really prevent this collapse?
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