Money & Finance › Markets of the world › Real estate as an investment
China's property crisis and Evergrande's collapse (2021–)
Default Dec 2021; delisted Aug 2025· Crisis or event
Fact, law or dataA rule, statute, definition or measured number.
China's housing boom turned to bust after 2021, when Evergrande, the world's most indebted developer, defaulted and dozens of rivals followed.
See it on the Money & Finance map →How it works
Developers borrowed heavily and pre-sold unbuilt apartments, using buyers' deposits to buy more land. In August 2020 Beijing capped their borrowing with the 'three red lines'. Evergrande, owing over $300 billion, defaulted on dollar bonds in December 2021; Country Garden followed in 2023. Many buyers were left with unfinished flats. New-home sales fell by about half from the 2021 peak and prices kept sliding. A Hong Kong court ordered Evergrande liquidated in January 2024, and it was delisted in August 2025.
Why it matters
Property and related industries were estimated at roughly a quarter or more of China's economy and most household wealth, so the slump fed deflation, weak spending and local-government strain.
Facts, rules and data
Company filings, court records and liquidators' reports, National Bureau of Statistics price and sales data, rating-agency default lists, and research by Kenneth Rogoff and Yuanchen Yang on property's share of output.
Debates and risks
How far prices must still fall, how large developers' true debts are (Evergrande's liquidators received about $45 billion in claims), and how Beijing will share the losses.
Connections (5)
▸China's bond market, the world's second largest absorbed developer defaults during China's property crisis and Evergrande's collapse (2021–)Fact, law or data
The connection
Developers sold bonds onshore in yuan and offshore in dollars. Most defaults hit the offshore dollar bonds held by global investors; onshore, many developers won payment extensions. Meanwhile, investors fled to safe government bonds, pushing yields to record lows, so the wider market absorbed the shock.
When and why
Hong Kong and mainland China, 2021–25; Evergrande, Country Garden, Sunac and dozens of smaller developers.
How we know
Rating-agency default data, company announcements and ChinaBond yield records.
Debates and risks
How much developer debt remains hidden in trusts, wealth products or local-government vehicles.
▸Global real estate: about $393 trillion, the largest store of wealth lost housing value in 2024 mainly because of China's property crisis and Evergrande's collapse (2021–)Fact, law or data
The connection
China holds nearly a quarter of the world's residential value. As Chinese home prices fell, global housing value dropped 2.7% in 2024 to about $287 trillion, even as commercial property and farmland values rose.
When and why
Savills' estimates published in October 2025.
How we know
The Savills Impacts report and China's official home-price statistics.
Debates and risks
Official Chinese price data may understate the fall, so the global loss could be larger.
▸China's property crisis and Evergrande's collapse (2021–) is often compared to Japan's bubble and 'lost decades' (1990–)Experts disagree
The connection
Both featured credit-fueled property booms, overbuilt cities, aging populations, falling prices and strained banks. Pessimists warn China faces a 'balance-sheet recession' like Japan's. Others stress differences: China is poorer and still urbanizing, its banks are state-owned, and it had no comparable stock bubble.
When and why
Comparisons by economists such as Richard Koo and by IMF staff, 2022–26.
How solid is the link?
Comparisons rest on data on credit, prices and demographics, but China's outcome is still unfolding.
Debates and risks
Whether China can avoid decades of stagnation by acting faster than Japan did.
▸China's property crisis and Evergrande's collapse (2021–) began with 2020 'three red lines' curbs on Leverage: amplifying gains and losses with debtFact, law or data
The connection
In August 2020 Beijing set the 'three red lines': liabilities under 70% of assets (excluding pre-sales), net debt under 100% of equity, and cash at least equal to short-term debt. Developers breaching them could not add debt, cutting off the credit that kept them afloat.
When and why
Beijing, August 2020; the People's Bank of China and the housing ministry.
How we know
Official announcements and developers' financial filings.
Debates and risks
Whether the curbs prevented a bigger crash later or triggered this one.
▸China's property crisis and Evergrande's collapse (2021–) led to Evergrande's 2025 delisting from Hong Kong Exchanges (HKEX) and the Hang Seng indexFact, law or data
The connection
Evergrande listed in Hong Kong in 2009. A Hong Kong court ordered it liquidated on January 29, 2024, and its shares were suspended that day. HKEX rules allow delisting after 18 months of suspension, so the listing was cancelled on August 25, 2025.
When and why
Hong Kong, 2024–25; court-appointed liquidators from Alvarez & Marsal.
How we know
HKEX announcements, company filings and court records.
Debates and risks
How much creditors will recover; by mid-2025 liquidators had sold only about $255 million of assets.