What is happening with China's housing market?

China's housing market is in a significant downturn, with new home sales at their lowest in over 15 years and prices for existing apartments plummeting.

How is the China housing crash affecting citizens?

Millions of Chinese households are curbing spending because their homes are losing value, leading to financial anxiety and reduced consumer activity.

Why are local governments in China struggling financially?

Local governments rely heavily on real estate revenue from taxes and land sales, which have drastically decreased due to the housing market crash, impacting their ability to pay civil servants.

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China Housing Crash: 15-Year Lows Spark Economic Fears

19 Jan

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Summary

New home sales hit lowest level in over 15 years.
Millions of households have curbed spending due to declining home values.
Local governments face revenue shortfalls impacting civil servant pay.

China Housing Crash: 15-Year Lows Spark Economic Fears

China is grappling with a severe real estate crisis, as new home sales have reached their lowest point in over fifteen years. Existing apartment prices are experiencing significant declines, leading millions of households to curb spending due to the diminishing value of their homes. This economic pressure has also impacted local governments, whose revenue streams are heavily dependent on property transactions, leading to difficulties in paying civil servants.

The housing market crash, which began four years ago and has progressively worsened, has become a more significant challenge for Beijing than earlier concerns about trade wars. While official statistics report steady economic growth of 5 percent for last year, driven by a boom in exports, some Western economists and research firms estimate the actual growth rate to be much lower, between 2.5 and 3 percent.