China’s property market has seen a major ups and downs recently. House prices in China have reached the level they were at 20 years ago. The decline has shocked the entire world. Meanwhile, Indians are also asking on social media whether property prices are going to fall in India too? In fact, China’s residential property market has been facing a prolonged slowdown, with prices in 70 cities hitting their lowest levels in almost two decades. Let’s try to understand the whole situation.
Prices have been falling continuously in China for four years:
- According to a report in The Economic Times, analysts do not consider the decline in China’s property market to be sudden. They have described it as “a slow decline” over the past four years.
- According to the report, real estate investment fell 14.7% in the first ten months of 2025, while new home sales have been falling for the fifth consecutive year. The area of unsold finished homes rose to 391 million square meters, a 72% increase compared to 2021.
- Citing data from the Bank for International Settlements, a post on social media X claimed that China’s inflation-adjusted residential property price index fell to 86.79 in the fourth quarter of 2025, well below its all-time high of 113 at the end of 2021.
- This represents a real decline of 23% over four years, effectively wiping out about a quarter of market value in inflation-adjusted terms. According to another report, the risk of further property prices falling in China is increasing.
China’s banks improve, but asset rates remain low:
- According to a report by caixingglobal, China’s major state-owned and giant-stock commercial banks saw a strong increase in revenue and profit in the first quarter of 2026. This was mainly due to an improvement in funding costs and a stable net interest margin.
- The six largest state-owned banks reported an average annual revenue growth of 8.5% in the first quarter of 2026. This is an acceleration of about 6 percentage points compared to the same period in 2025. China Construction Bank (CCB) and Agricultural Bank of China (ABC) led the way with revenue growth of 11.15% and 10.5%, respectively. The net profit of the six largest banks increased by an average of 3.4%, with ABC and Bank of China recording the highest gains.
- The improvement in profitability is good news for China’s banking sector, which has been struggling with structural challenges related to asset quality due to a prolonged slowdown in the property market and declining consumer confidence.
Why have property prices in China fallen so much?
- According to data from the Bank for International Settlements, if we adjust for inflation, house prices in China have fallen by about 23 percent compared to 2021. This means that a large part of the savings of people there have been lost.
- China’s economy is the second largest in the world after the United States. Real estate and related activities used to account for about 25 percent of its GDP. Ordinary people there preferred to invest money in homes rather than in the stock market. Now, as house prices fall, millions of families are losing their assets.
The slowdown in China’s property market is particularly severe:
- The slowdown in China’s property market is particularly severe, as real estate and related sectors once contributed about 25% to China’s GDP. While real estate was the primary source of income for millions of Chinese households, in Western economies, equities play a much more important role. The decline in property values has significantly affected household wealth.
- The crisis has also hit major developers. Evergrande, which was saddled with more than $300 billion in debt, filed for bankruptcy and was delisted from the Hong Kong Stock Exchange in August 2025. Country Garden failed to meet its obligations, while Vanke, long considered a stable company, reported a record $6.8 billion loss in 2024 and is seeking to extend its bond maturities.
Chinese house prices in India:
The decline in China has become a topic of discussion on social media. Social media users in India are wondering if a similar decline could happen in the domestic market in the future? The concerns are a weak currency, stock market volatility, job uncertainty and the economic impact of artificial intelligence or AI. Some users also pointed out that the equity market has already corrected, reflecting almost two years of weak returns on the index, with real estate prices in many Indian cities remaining high.
Will property prices in India also fall at a faster rate?
- Indeed, China built some uninhabitable houses and flats, which no one could find to live in. These fell into a state of ghost towns. However, India is still facing a housing shortage for the middle class. Here, people are buying houses for their livelihood rather than investing in property. Therefore, prices are likely to fall
