China's Housing Market Facing Long Slump
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
The devastating property crisis that broke out in China after the collapse of giants like Evergrande is far from being resolved, experts say, as new home prices in the country continue falling and new construction projects get cut down.
The sector has gone "from a free fall" in the years following Evergrande's default in 2021 "to a gradual fall" today, Zhaopeng Xing, senior China strategist at ANZ, told Newsweek.
What Is Happening In China's Property Market?
China's property market has propelled the country's explosive economic growth over the past few decades, single-handedly lifting hundreds of millions of Chinese people out of poverty and into the middle class.
But since the collapse of giant developers like Evergrande and Country Garden, the sector has been sinking, threatening to drag the Chinese economy down with it.
Despite efforts from the government to revive the struggling property sector, which was once the country's economic powerhouse, recent data show that it is still unable to walk on its own feet and demand is failing to pick up.
High-rise buildings under construction stand behind a Chinese national flag waving in the foreground, as cranes continue work on partially completed towers on May 07, 2025, in Chongqing, China.
High-rise buildings under construction stand behind a Chinese national flag waving in the foreground, as cranes continue work on partially completed towers on May 07, 2025, in Chongqing, China.New home prices fell 0.22 percent in 70 Chinese cities in May, the largest decline in seven months, according to figures from the National Bureau of Statistics. Existing home prices fell by an even bigger 0.5 percent, marking the steepest decline in eight months. In the same month, residential sales by value dropped 6.1 percent year-on-year, while real-estate investment plunged 12 percent from a year earlier.
Kent Deng, professor of economic history at the London School of Economics (LSE), told Newsweek that there has been "no real recovery so far" in the Chinese market.
"It is a story of housing oversupply," he said. "China has had 600 million permanent buildings, roughly two people a building. It will take 30-50 years to absorb them," he added. This same oversupply is leading prices to fall and new construction projects to be cut down.
What Does This Mean for the Country?
The latest data show that even the Chinese government policy interventions are failing to make a real dent in the situation facing homebuyers in the country, who are struggling with growing economic uncertainty linked to the trade war with the U.S. and income instability.
But the central government seems determined to try to support the sector, with Premier Li Qiang pledging action during a state council meeting last week, according to state broadcaster CCTV. They might have a hard time getting the property sector out of the current slump, experts said.
"Recovery will be slow as people do not have more purchasing power to buy new houses," Deng told Newsweek.
The property sector plays an outsize role in China's economy, contributing to nearly a third of its GDP. Further contractions could continue hurting the country, experts said.
"China's property market values 600 trillion yuan [$83.5 billion]," Xing said. "A 10-percent price fall means 60-trillion-yuan loss to households. The negative wealth effect will curb consumption and investment," he said.
According to Xing, new development will not pick up in the next decade in China "as urbanization will likely come to an end by 2035," he said.
In a report released on Monday, Goldman Sachs experts said that demand for new homes in China is likely to remain substantially below its 2017 peak over the next few years, especially as the country's population shrinks and continues aging.
"We calculate that annual demographic demand in urban China will average only 4.1 million housing units per year in 2025-2030, compared to 9.4 million units per year in the 2010s," researchers wrote in the report shared with Newsweek. "It is striking that China's demographic demand for new urban housing likely halved within a decade."
It could be a dramatic change for a country that has built its economic backbone on the property sector. While China has been trying to shift its economy away from the housing market, the result has not been good, Deng said, "because investment opportunities are very limited outside the housing market."
"China will have to switch the property sector from a construction-based model to a service-like model. The transformation will change a lot of policies including land finance," Xing said.
"The sector will be like real estate in other developed economies; 75-percent value added will be housing rents, not new home sales," he said. "The economy will shift away from property construction, but not real-estate services. The latter will play a bigger role in the economy."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
4 hours ago
- Newsweek
Fervo Uses Oil Drilling Technology to Dig Deep for Clean Geothermal Energy
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The U.S. oil and gas industry sparked an energy revolution a few decades ago by thinking in a different direction—literally. Horizontal drilling, combined with hydraulic fracturing, unlocked new petroleum reserves and quickly propelled the U.S. to global leadership in oil and gas. Fervo Energy, a company headquartered in oil capital Houston, is aiming for a similar revolution in geothermal energy by borrowing a page from the oil industry's playbook. "Drilling is drilling," Fervo's Vice President of Strategy Sarah Jewett told Newsweek. "That is kind of the 'aha' moment that our founders really found when they started this business." By using drilling technology advanced by the oil and gas industry, Fervo is drilling deeper, drilling sideways and drilling in new places to unlock new reserves of heat energy. A member of Fervo Energy's drilling rig crew climbs to the top of the rig in Utah. A Fervo well recently reached a depth of more than 15,000 feet, where rock is greater than 500... A member of Fervo Energy's drilling rig crew climbs to the top of the rig in Utah. A Fervo well recently reached a depth of more than 15,000 feet, where rock is greater than 500 degrees Fahrenheit. More Courtesy of Fervo Energy "There's no reason why geothermal energy wells should be using older, more outdated rigs," Jewett said. Traditional geothermal energy relies on finding steam-bearing resources and drilling into them vertically to capture the steam heat. It requires not only hot rock but also enough permeability in the rock to allow water and heat to come together. That made geothermal power geographically limited to those places with just the right combination of factors. Fervo is developing an enhanced geothermal system (EGS) that creates some of those conditions by making rock permeable and injecting liquid where hot rock is available. Instead of just drilling vertical wells, the company uses horizontal drilling and hydraulic fracturing techniques to harvest naturally occurring heat. "We are just using the heat from rock under the earth rather than steam directly to create electricity," Jewett explained. The U.S. Department of Energy calls EGS "the next frontier" for renewable energy. Because the technology can tap a much wider range of geothermal resources, the DOE estimates that EGS has the potential to power more than 65 million American homes and businesses. "Really, hot rock is everywhere," Jewett said. "It's just a question of how deep that rock exists and how economic is it to actually get to [that] depth." Rock that reaches 400 to 500 degrees Fahrenheit is, generally speaking, closer to the surface in the western U.S. than in the eastern states. Fervo is focusing efforts in southwestern Utah, site of the company's Cape Station development where the company is building three power plants. Fervo Energy is building three power plants as part of its Cape Station development in southwestern Utah. The first is scheduled to come online in the summer of 2026. Fervo Energy is building three power plants as part of its Cape Station development in southwestern Utah. The first is scheduled to come online in the summer of 2026. Courtesy of Fervo Energy Jewett said Fervo's first power plant is scheduled to come online next summer with the first phase delivering 100 megawatts of clean power. An additional 400 megawatts of capacity is scheduled at the same site by 2028, and power purchasers include Shell Energy and Southern California Edison. Last week the company announced that a new round of funding for the Cape Station development had secured $206 million from investors including Breakthrough Energy Catalyst, founded by Bill Gates. In another announcement last week, Fervo shared results from one of its exploration wells that pushed the boundaries of geothermal technology. The company's deepest well yet reached more than 15,750 feet, nearly 3 miles beneath the surface. Rock temperature at that depth is greater than 500 degrees, Jewett said, and the company is testing what happens to drill bits, casings and electronics at very high heat. "One of our paths to innovation we call 'boring is beautiful,'" she said. As wells reach greater depth and higher heat, companies providing parts and services test the performance of drilling equipment under increasingly harsh conditions. "That has been a really virtuous cycle of innovation between us and our partners." In another parallel with the oil and gas industry, Fervo had the petroleum consulting company DeGolyer & MacNaughton conduct an independent energy reserve estimate for the Cape Station project. Such reserve estimates are common when oil companies develop a new resource, but the practice is new for the geothermal industry, Jewett said. DeGolyer and MacNaughton applied similar principles from oil analyses to evaluate the thermal energy potential at the site and concluded that Fervo's site could yield 5 gigawatts of power. A gigawatt is enough to power a city of 750,000 homes. With those positive developments on the technical and financial fronts, Fervo is clearly on a hot streak. But like the rest of the clean energy sector, the company is also closely watching policy developments in Washington. Tax credits from the 2022 Inflation Reduction Act were a boon for new clean energy technology developers, not only because of the size of the credits but because the 10-year lifespan of the credits provided long-term stability to attract private investors. The "one big beautiful" bill approved by the Republican-controlled House of Representatives late last month would end most of those clean energy credits and debate is underway on a Senate version. "We're fighting pretty hard to preserve tax credits because for these very early projects, it's incredibly useful to have that that support," Jewett said. Fervo's first phase of development would not be affected by the changes, she said, because construction is already underway, but future projects could become more challenging. Regardless of policy changes, however, she said she is confident that EGS power will find a market as a steady source of electricity to meet surging demand. "Geothermal energy projects are capable of providing that 'always on' power," she said. "And I think that's why it's become so attractive."
Newsweek
5 hours ago
- Newsweek
Millennial Woman Was Always a 'Finance Nerd'—by Her Mid-30s She'd Retired
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. For one self-described "finance nerd," crunching numbers did not just build wealth—it unlocked the coveted path to early retirement. Jumoke, a former investment banker based in London, England, retired in her early 30s and now lives in part off passive income from her investments. "I retired from my 9-5 in my 30s and now I live off my investments," she told viewers online in a YouTube video from February. "How would you like to wake up every morning knowing that your bills and lifestyle are completely funded, not by your 9-5 salary, but by passive income?" The 16-minute video has triggered a wave of support and discussion among viewers, with many praising her clear breakdown of financial concepts and her practical walk-through of building $1,000 per month in dividend income. She told Newsweek that she used the platform since rejoining social media via YouTube in 2023—having left all social platforms in 2017—not to flaunt her success but to unpack the habits and knowledge that enabled her to achieve financial independence early in life. "I became an early 9-5 retiree before the age of 40 or said differently, I became work-optional before 40," Jumoke, who would prefer to keep her full identity private, told Newsweek. "I hold the Chartered Financial Analyst and Chartered Alternative Investment Analyst designations, two of the top accreditations in my industry." From left: Jumoke poses for a professional headshot; and speaks in a YouTube video. From left: Jumoke poses for a professional headshot; and speaks in a YouTube video. @JumokeMi Jumoke, now in her late 30s, began her journey in the high-stakes world of global finance. She worked for one of the top investment banks in the world, advising wealthy clients and institutions across Europe, the Middle East and Africa. But despite the prestige of her job, and how much she enjoyed working with her clients, she quietly built an investment portfolio designed to generate consistent cash flow and long-term independence from the rat race. What pushed her to start sharing her knowledge online was not a career pivot—but the pandemic. "I took the knowledge and experience I had in investing for granted because I assumed most people were aware of good money and wealth building habits and investments in general," she said. "But during the pandemic, my perspective significantly changed. "Financial markets were extremely volatile but they also presented a once in a lifetime wealth building opportunity." The market volatility in 2020 drew friends to her with questions about how to secure their finances. Realizing that most people lacked foundational financial education, she launched her YouTube channel JUMOKE MI - FINANCE NERD, under the handle @JumokeMi, with a mission to teach the basics of wealth building in a digestible, authentic way. And building passive income is a lot more accessible than it has ever been thanks to the internet, access to finance and other tools required "The 'finance nerd' part comes from my healthy obsession with studying and investments," she said. "My aim is to provide financial education that sadly is not taught in school. "I loved my job and my clients and didn't leave because I hated it, on the contrary, a six-month travel hiatus turned into years-long, and now, I am absolutely enjoying living fully on my own terms and schedule." Breaking Down Dividends Central to Jumoke's approach is dividend investing. Dividends are payments made by companies to their shareholders, often on a quarterly basis, as a way to distribute profits. For those aiming to fund a lifestyle without a salary, value or dividend-paying stocks can offer a stable source of income—if approached correctly. "The key is to find strong and reliable dividend-paying companies that can help you build a consistent or steady cash flow," she explained in the video. She walked viewers through concepts like dividend yield—the annual dividend income as a percentage of the stock's price—and demonstrated how to calculate projected income based on different investment scenarios. Jumoke emphasized targeting stocks with a proven track record of paying and increasing dividends. "The recommendation is to look out for stocks that have a very strong track record of paying consistent and growing dividends," she said, adding that she invests in a combination of growth and value stocks. The idea for her video came during a conversation with a friend, a well-paid corporate lawyer based in London who asked how she managed her finances in retirement. The contrast between their experiences prompted her to share her story publicly. "She struggles to save monthly, not to talk of investing, even on her high salary," Jumoke said. "It dawned on me that more people could benefit from how I quietly did things over the years. "So I took to YouTube to introduce dividend investing to my audience and explain how I part fund my lifestyle through dividends and income from other assets." Her video has racked up more than 540,000 views to date, inspiring thousands by demystifying how dividend investing can supplement, or even replace, traditional income. "People often think of retirement in an outdated, archaic manner," she said. "Retirement has changed and for the better, and it is now about freedom to pursue passion or just live, travel, rediscover and enjoy the beauty that the world has to offer. "I want to empower people to believe that it is possible for a regular individual to achieve financial liberation before 65 and that they don't need to be on a six figure salary to attain that financial freedom." Jumoke's story challenges long-standing myths about money—that financial freedom is only for the rich or that early retirement is only for tech entrepreneurs. "Some people view wealth building as an activity for the rich without realizing that you are a sum of all decisions you've made in the past, and your future will be a sum of decisions you make from today," she said. "It is not an easy journey but it is doable. "And building passive income is a lot more accessible than it has ever been thanks to the internet, access to finance and other tools required." Though her approach has reached a large audience, her goal was never followers or internet fame. "I did not share my journey with the intent of going viral," she said. "I thought: if 100 people watch this and 10 people start building investment income as a result, I'm happy." What drives her is a simple promise to her audience: "Every video has one singular objective: For viewers to leave saying—I feel smarter because I learned something new or that was a good reminder to pursue financial freedom." Do you have a monetary dilemma? Let us know via life@ We can ask experts for advice, and your story could be featured on Newsweek.
Newsweek
5 hours ago
- Newsweek
Graph Shows US Births Decline Over 50 Years
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Newsweek has created a graph to show how births in the United States have declined over the last 50 years. This has happened for every age group, fluctuating across the decades, rising steadily in the 1980s and 1990s, and declining sharply after 2008, according to the U.N. Population Division. The Context America is one of many countries around the world struggling with falling birth rates. Fertility rates are projected to average 1.6 births per woman over the next three decades, according to the Congressional Budget Office's latest forecast released this year. This number is well below the replacement level of 2.1 births per woman required to maintain a stable population without immigration. The Donald Trump administration has made this issue one of its priorities, the White House exploring giving women a "baby bonus" of $5,000, according to an April New York Times report. The Birth Rate Situation In America Different age groups have been affected differently by the shift in births. While mothers between the ages of 50 and 54 had no babies in 1975, this number gradually increased to more than 100 over the years and was 159 in 2024. Conversely, teen pregnancies have drastically and consistently declined since 1975, when there were 599,926 before this number started to go down in the early 2000s, to 136,376 in 2024. The issue with a lower number of births, taking place while the elderly live longer, means that is that the country is headed for a time when there are more elderly, dependent people than there are working-age people. At the beginning of this year, a report by the McKinsey Global Institute warned that major economies are heading toward a "population collapse" by 2100 because of falling fertility rates. Trump said during a speech in December: "We want more babies, to put it nicely." Many trying to tackle this issue have focused on public health policies and financial plans, often citing the 2008 financial crisis, its effect on housing, inflation and pay as a major contributor to why people delay having children, have fewer of them or to not have them at all. Parental leave, improved childcare services, and financial independence in general are all things advocates call for in the hopes of making it easier for people to have children. Earlier this month, Trump announced a $1,000 tax-deferred investment account for American babies born during his second term. The White House said the so-called "Trump Accounts" will "afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning." Meanwhile, the United States could make childbirth free for privately insured families, in an effort to tackle declining birth rates. The bipartisan Supporting Healthy Moms and Babies Act, which would designate maternity care as an essential health benefit under the Affordable Care Act, was introduced in the Senate in May. Beth Jarosz, a senior program director of U.S. programs at the Population Reference Bureau, said that "reducing health care costs is important, but may not be enough to move the needle on births." "The cost of childbirth is just one of the many costs of having a child, and people are also reeling from the much bigger costs of child care, housing, and other necessities," she told Newsweek. Culture's Impact On America's Birth Rates However, while financial concerns are generally accepted as a major contributor to declining birth rates, they are not the lone cause. Bell said that even the policies she calls for "are also unlikely to increase the birth rate, as evidence from other countries with much more supportive policies suggest." Norway is considered a global leader in parental leave and child care policies, and the United Nations International Children's Fund (UNICEF) ranks it among the top countries for family-friendly policies. But it, too, is facing a birth rate crisis. The Nordic country offers parents 12 months of shared paid leave for birth and an additional year each afterward. It also made kindergarten (similar to a U.S. day care) a statutory right for all children aged 1 or older in 2008. And yet, Norway's fertility rate has dropped dramatically from 1.98 children per woman in 2009 to 1.44 children per woman in 2024, according to official figures. The rate for 2023 (1.40) was the lowest ever recorded fertility rate in the country. Newsweekspoke to several experts about Norway specifically, who all cited recent culture changes. Photo-illustration by Newsweek/Getty For example, "young adults are more likely to live alone" and "young couples split up more frequently than before," Rannveig Kaldager Hart, a senior researcher at the Norwegian Institute of Public Health's Centre for Fertility and Health, said. American Vice President JD Vance touched on cultural changes when he said in January: "We failed a generation not only by permitting a culture of abortion on demand but also by neglecting to help young parents achieve the ingredients they need to lead a happy and meaningful life. "Our society has failed to recognize the obligation that one generation has to another as a core part of living in a society. So let me say very simply, I want more babies in the United States of America."
