China’s property crisis continues to weigh heavily on the country’s economy, even after Evergrande founder Hui Ka Yan was sentenced to life imprisonment for financial crimes.
The property downturn, which began about six years ago, has left millions of homes unfinished, pushed down house prices and weakened land sales, construction and consumer spending. The crisis is also forcing China to depend increasingly on exports to support economic growth.
China’s economy grew by 4.3% in the second quarter of 2026, its slowest pace in more than three years. Analysts say the prolonged housing slump remains one of the biggest obstacles to stronger domestic consumption.
Evergrande, once one of China’s largest property developers, defaulted in 2021 and entered liquidation in 2024. Other major developers, including Country Garden and China Vanke, have also faced severe financial difficulties.
President Xi Jinping has shifted government support and bank lending away from property and toward strategic industries such as semiconductors and robotics. However, analysts say these sectors are still too small to fully compensate for the weakness in real estate.
In smaller Chinese cities, second-hand home prices have fallen sharply from 2020 levels, reducing household wealth and discouraging people from spending. One analyst estimates that property prices may need to fall another 40% from 2025 levels before the market reaches equilibrium.
Some economists believe the worst of the crisis may have passed, but they expect a slow and prolonged recovery.
The property crisis has also contributed to growing trade tensions with the United States and European Union, as China increasingly relies on exports to drive growth.
For millions of Chinese homeowners, however, the impact remains severe. One homeowner quoted by Reuters said his property had lost about 25% of its value since he bought it in 2019, reflecting the financial pain caused by the prolonged housing downturn.
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