Chinese home prices have dropped to their lowest levels in a decade, with real prices falling back to pre-2006 levels [1].
The decline signals a deepening crisis in the domestic property market, which is a primary driver of China's economic growth and household wealth.
Price drops have become widespread across the country. Data shows that price declines were reported in 88 of the top 100 Chinese cities [1, 3]. This broad downturn affects both new construction and existing properties, reflecting a systemic lack of confidence among buyers.
Resale home prices experienced a faster month-on-month decline in June 2024 [1, 3]. While new-home prices also fell at a faster pace in May 2024, the resale market has seen a more acute drop toward these decadal lows [2, 4].
Analysts said the slump is due to a combination of weak demand and over-supply. The market is currently struggling with deteriorating confidence, as buyers hesitate to enter a market where values continue to slide [1, 2, 4].
Government efforts to stabilize the sector have so far failed to reverse the trend. The persistence of these declines through August 2024 suggests that previous policy supports were insufficient to stop the bleeding [2].
“Real home prices in China have slipped back to pre-2006 levels.”
The return of real home prices to pre-2006 levels represents a massive erasure of equity for millions of homeowners. Because property is the primary vehicle for wealth accumulation in China, this crash suppresses consumer spending and creates a negative wealth effect that can drag down the broader national economy for years.
