China's Property Market: Why the Crisis Is Far From Over Despite Government Intervention
China's property market remains in deep crisis despite multiple government intervention rounds. Housing prices continue falling in most cities. Major developers (Evergrande, Country Garden) still restructuring. Local government land revenue collapsed.
Current State
- Housing prices falling in 70%+ of tier 1-3 cities
- New home sales down significantly YoY
- Developer debt restructuring ongoing (Evergrande liquidation)
- Local government revenue from land sales down 30-50%
Government Response
- Mortgage rate cuts multiple times
- Eased purchase restrictions in most cities
- 'White list' for project completion financing
- Property tax pilot shelved indefinitely
Analysis
China's property correction is structural, not cyclical. The 20-year property bull market created oversupply, unrealistic price expectations, and an economy overly dependent on real estate (25%+ of GDP directly and indirectly). Government intervention slows the decline but cannot reverse it. The correction has years to run. For the broader economy, the property drag ensures China's growth remains below potential, requiring other sectors (AI, green energy, high-tech manufacturing) to compensate.