China is grappling with a deepening real estate crisis as property market conditions continue to deteriorate sharply. Once a major pillar of the economy contributing nearly 25% to GDP, the sector is now witnessing a prolonged downturn. Property prices have fallen at their steepest pace in over two decades, triggering concern among investors, developers, and households.
According to data from the Bank for International Settlements (BIS), China’s house price index declined from 113 points in 2021 to 86.79 points by the end of 2025, reflecting nearly a 25% erosion in property wealth over four years. In addition, around 391 million square meters of housing remains unsold, indicating severe inventory overhang in the market—72% higher than 2021 levels.
The crisis has severely impacted major real estate developers. Evergrande Group collapsed under debts exceeding $300 billion and was eventually delisted from the stock exchange in August 2025. Similarly, Vanke reported record losses of $6.8 billion in 2024, while Country Garden has defaulted on its debt obligations, highlighting widespread stress across the sector.
The downturn has also sparked global discussions, including concerns in India over possible spillover effects. Factors such as currency fluctuations, stock market volatility, and emerging job market uncertainties linked to artificial intelligence have led to speculation about potential pressure on Indian real estate prices.
However, economists point out key structural differences between the two markets. Unlike China’s oversupply and speculation-driven bubble, India continues to face a housing shortage, particularly in urban areas driven by rapid urbanization. With demand largely end-user driven rather than speculative, experts believe the Indian real estate sector remains comparatively stable and less vulnerable to a China-like collapse.