China’s economy grew 5% in 2025 despite a four-year housing market crash

China’s economy grew 5 percent last year, meeting the government’s target, even as a property market crash that began four years ago continued to erode household wealth and curb spending. New home sales have fallen to their lowest level in more than 15 years and prices for existing apartments are plummeting, the article said, prompting millions of households to pull back on consumption and leaving some local governments struggling to pay civil servants.

At the same time, exports produced another record trade surplus in 2025, and the economy expanded from October through December at a pace that, if extended for a full year, would represent 4.9 percent growth. Official data show home prices down about a fifth since 2021, while unofficial measures suggest declines at least twice as steep.

Transactions have stalled: a report by the China Index Academy said homes listed for sale now remain on the market an average of 22.2 months. Buyers have been demanding discounts of up to 80 percent from the 2021 peak, and analysts such as Zhu Tian have written that “the sharp decline in the real estate sector can almost entirely explain the lackluster economic performance over the past three years.” Some Western economists, including the Rhodium Group, estimate actual growth was closer to 2.5 to 3 percent and could slow further, the report said.

Key Topics

Business, China, Real Estate, Housing Market Crash, Trade Surplus, Rhodium Group