China's real estate market is in the grip of a deepening crisis, with hundreds of millions of ordinary citizens watching their wealth erode — even as President Xi Jinping made no mention of the property bust during a recent visit to Shanghai, according to an analysis published in The Diplomat. The silence at the top has drawn sharp attention as the scale of the collapse becomes harder to ignore.

The Scale of the Collapse

New home sales by China's top 100 builders fell 42 per cent year-on-year in October 2025, according to estimates by China Real Estate Information. Following that disclosure, Chinese officials reportedly instructed private data providers to stop publishing home sales figures — a move flagged by German broadcaster Deutsche Welle (DW) and cited in The Diplomat's analysis.

The national housing market continues to carry an enormous overhang. The New York Times reported in May that roughly 90 million apartments across China remain either empty or unfinished, even as prices in Shanghai have shown some signs of a partial rebound. Critics argue that localised recovery in tier-one cities masks a far grimmer picture nationally.

Why Property Matters So Much to Chinese Households

Professor Kenneth Rogoff of Harvard University, speaking on the Brookings Podcast on Economic Activity in April, laid out the structural stakes plainly. 'Real estate has been the cornerstone of the Chinese growth model, and if you include infrastructure which is closely related, it accounts for roughly a third of demand in China over a very long period,' he said.

Rogoff further noted that 'the collapse in housing prices is a huge collapse in wealth, because Chinese citizens hold over 70 per cent of their wealth in housing… the first order problem is that people feel a lot poorer and cut back their consumption accordingly.' That consumption pullback, economists warn, risks compounding an already slowing economy.

A Tragedy Decades in the Making

The Diplomat's analysis frames the crisis in historical terms, describing it as 'a tragedy for the hundreds of millions of Chinese buyers who have either lost their homes, or who are so far underwater with the loans that neither re-financing nor selling the property is a possibility.' Home ownership was only reinstated in China in the 1990s, meaning the bust has arrived within a single generation of the market opening up.

Property and closely linked infrastructure together drove China's growth engine for decades, alongside exports. The unwinding of that model now poses what analysts describe as a systemic risk to household financial health — not just to developers or financial institutions.

Government Silence and What Comes Next

Xi's decision not to address the property market during his Shanghai visit has reinforced perceptions that Beijing is reluctant to publicly acknowledge the depth of the crisis. The suppression of private sales data has further narrowed the information available to investors and households trying to assess their exposure.

With 90 million empty or unfinished units weighing on supply and consumer confidence fragile, analysts say a durable national recovery remains distant. The trajectory of China's property sector — and how much of its pain filters into broader economic demand — will be closely watched in the months ahead.