The real estate crisis continues to worsen and is already dragging down a good part of the country’s economy. What for years was one of the main drivers of growth has become a burden: paralyzed works, empty homes and prices in free fall paint an increasingly complicated picture.
In cities like Tianjin, huge unfinished projects dominate the urban landscape. One of the most visible examples is a tower of almost 600 meters whose construction was stopped more than a decade ago and which today remains an empty structure. However, this is not an isolated case.
In different regions of the country, unfinished or completely uninhabited residential complexes are multiplying, to the point that it is estimated that there are tens of millions of empty and numerous homes “ghost towns”.
The origin of this crisis dates back to 2021when the real estate giant Evergrande collapsed, drowned by a gigantic debt. Since then, other large developers have followed the same path, and the sector—which once represented more than a quarter of the GDP—has continued to decline.
Five years later, the situation continues to deteriorate. Real estate sales have halved in just four years and everything indicates that 2026 will be the sixth consecutive year of declines. In addition, prices have plummeted by more than 30% in some neighborhoods, which directly hits the assets of millions of families.
“This crisis is so deep that only the State has the capacity to absorb the excess supply”warn analysts where they also warn of the impact on large cities.
The problem, they explain, is structural: construction continued at a high pace despite the drop in demand, which has generated an excess of housing that blocks any recovery. “This continuous decline is eroding buyer confidence. It is a vicious circle that is difficult to break,” they add.
For decadeshousing was the main savings refuge in . It is estimated that around 70% of the wealth of urban households is invested in real estate. However, much of that value has evaporated since 2021, leaving many families in a delicate situation, and even with debts greater than the value of their properties.
The impact goes beyond the real estate sector. Falling prices make households feel poorer, reduce consumption and increase savings, which further weakens the economy. It also affects local governments, which relied heavily on land sales for financing and now have difficulty balancing their accounts.
The authorities have chosen relax some restrictions, facilitated credit and supported projects in difficulty, in addition to betting on public housing and urban renewal. However, many experts consider that these actions are still insufficient.
International economists warn that the country faces a greater challenge: curbing the impact of a prolonged slowdown in the real estate market on growth and finances. Without a recovery in the sector, domestic demand will continue to weaken, and the new technological industries, although expanding, They still don’t have enough weight to compensate for it.
