China's Housing Crisis Drags On After Evergrande Boss Gets Life in Prison

A Chinese court last week sentenced Hui Ka Yan, the founder of China Evergrande, to life in prison. Hui was once Asia's richest person and the face of China's booming property market. He was found guilty of crimes including misusing company money and bribery. His sentencing made headlines across China, but it has done little to fix the country's deep housing problems.

China's property market has been in crisis for six years now, and there is no clear end in sight. Millions of homes that were started but never finished sit empty across the country. Prices for new homes in big cities like Beijing and Shanghai have stopped recovering, and home sales and construction are still falling. In smaller cities farther from the coast, used-home prices have dropped almost 25 percent since 2020.

Evergrande, once China's largest property developer, stopped paying its debts in 2021 and began shutting down completely in 2024. Another big company, Country Garden, also stopped paying its debts in 2023 and has not bought any new land since then. A third major developer, China Vanke, is trying to delay repaying its loans and has replaced most of its leaders with people from government-owned companies. These collapses show how deeply the crisis has spread through China's real estate industry.

Because so many private property companies have failed, the government now plays a much bigger role in housing. State-owned developers — companies controlled by the government — have taken over most of the market. Banks have mostly stopped lending money to private builders. This shift means the housing market is now more controlled by the government than ever before.

China's leader, President Xi Jinping, has tried to move money and support away from real estate and toward technology industries like robotics and computer chips. However, experts say those newer industries are still too small to make up for the damage done by the housing slump. China's economy grew 4.3 percent in the spring of 2025, its slowest pace in more than three years. That is a sign that the housing crisis is still hurting the whole country.

Because people are spending less money at home, China has turned to selling more goods to other countries to keep its economy growing. China's trade surplus — the gap between what it sells abroad and what it buys — has more than doubled since 2019. This has caused trade tensions with the United States and the European Union, who worry that cheap Chinese exports are hurting their own industries. Some economists call this problem 'China Shock 2.0.'

Experts disagree about how bad things will get before they get better. Sam Radwan, a real estate expert based in Chicago, says home prices may need to fall another 40 percent before they reach a fair level, and that process could take another ten years. He also estimates it will take about 18 months just to sell all the homes that are currently sitting unsold. 'Chinese citizens are very smart people,' Radwan said. 'They know well enough that they're nowhere near the bottom but they can't see the bottom.'

For ordinary people in China, the pain is very real. Jason Wang, a 38-year-old homeowner in Shandong province, said the value of his home has dropped 25 percent since he bought it in 2019. The news of Hui Ka Yan's sentencing sparked fierce reactions on Chinese social media, with one hashtag getting more than 370 million views. 'The pain is unbearable,' Wang said. 'When people can barely feed themselves, who can afford to buy a house?'