In March, the Shanghai Cyberspace Administration, in conjunction with multiple departments, conducted a crackdown on self-media accounts spreading negative comments about the real estate market, prohibiting the dissemination of statements such as “housing prices plummeting” and “housing market collapse,” exposing the insecurity and fear of the ruling class of Zhongxiu regarding the current downturn in the real estate industry and others. Zhongxiu used the recent increase in housing prices in cities like Shanghai to argue that first-tier cities’ housing prices will “stop falling and stabilize,” but due to the existence of the housing price filing system (where prices below the filing price are fined), new home prices are actually manipulated by Zhongxiu, while the prices of second-hand homes, which Zhongxiu has less control over, are plunging—by April 2025, the average price of second-hand residential properties in 100 key cities nationwide was 13,892 yuan/m², down 0.69% month-on-month, with the decline widening compared to March, and down 7.23% year-on-year, continuing a three-year decline. All cities are experiencing declines this time. Additionally, rental listings in 40 cities nationwide decreased by 1.66% year-on-year. State-owned enterprises under Zhongxiu, such as Wuhan Urban Construction, are forced to take over unsold housing from Hubei University to offset debts, while Vanke received funding from Shenzhen Metro, and Country Garden’s housing projects for demolition households in Foshan are left unfinished, forcing displaced households to prepay for repairs. Other real estate companies are also withdrawing from the market or going bankrupt. In the first quarter of 2025, new construction area for real estate dropped to the lowest since 2006, shrinking more than 60% from the peak in 2021. These facts clearly indicate that the housing market does not have a “little spring” and remains in depression.
Zhongxiu retaliates by claiming that those exposing the facts are doing so to profit from “toxic traffic,” essentially accusing others of being thieves and framing the falling housing prices as purely psychological factors. They also employ other Keynesian measures, such as issuing special bonds since the second half of last year to buy back land parcels that real estate developers have not started or have left unfinished, attempting to ease developers’ cash flow difficulties. However, the root of the debt still lies with the working people, who are being looted to help the bourgeoisie survive the crisis, further squeezing the consumption capacity of the masses. The “Three Clears and Three Demolitions” campaigns in provinces like Guangdong are carried out under the guise of “improving rural living environments and promoting rural revitalization,” but in reality, they are demolishing old and illegal housing after reclaiming land for urban expansion and land finance, causing many farmers to lose their original homes and for Zhongxiu to take over hundreds of millions of square meters of unsold commercial housing. However, Zhongxiu’s Keynesian policies cannot increase demand with purchasing power; they are increasingly unsustainable, often unable to pay developers in cash when repurchasing land, resorting instead to exchanging other land parcels or waiting until the repurchased land is sold before making payments. Barbaric demolition no longer offers cash payments, only housing vouchers (although previous subsidies mostly benefited wealthy farmers).
In the first quarter of 2025, new long-term resident loans related to home purchases totaled 883.2 billion yuan, down 98.9 billion yuan or 10% from the first quarter of last year, which was 982.1 billion yuan. Seeing that the real estate sector remains depressed, Zhongxiu implemented new regulations for “good housing” construction during the May Day holiday, such as calculating balcony area at half of the projected area to improve housing efficiency and reduce shared areas, ostensibly to “make people’s living better,” but actually to entice people to buy new homes that generate more fiscal revenue for Zhongxiu—over 70% of the housing price is retained by the government, while only a few percent come from second-hand sales. Although housing prices have slightly decreased, wages have fallen (considering increased working hours and rising prices), unemployment remains high (Zhongxiu, to hide the fact that it temporarily stopped releasing youth unemployment data, reported a 16.5% urban youth unemployment rate in March, but according to Zhaopin and Liepin statistics, the unemployment rate for college graduates in 2024 was between 30-45%). By March 2025, the total outstanding loans of Chinese residents reached 83.87 trillion yuan, while the total disposable income of households in 2024 was 58.25 trillion yuan, resulting in a debt-to-income ratio of 144%, higher than the 100-120% in major capitalist countries like the US, Japan, and Germany, with lower-income groups bearing even higher debt burdens. Additionally, in 2024, the average housing price-to-income ratio in first-tier cities was 26.1; in second-tier cities, it was 10.8. Under such conditions, where housing consumes a lifetime of savings, the working people cannot afford so-called “good houses.” The decline in housing prices is not due to “psychological factors” as Zhongxiu claims but is fundamentally determined by material conditions.
Moreover, if the goal is truly to “make people’s living better,” the 420 million square meters of housing currently for sale could have been rented out at low prices long ago. However, as representatives of the bureaucratic monopoly bourgeoisie, Zhongxiu is unwilling to do so, merely pretending to allocate 5% of housing for public rental housing. Previously, in response to hundreds of collective loan suspensions by homebuyers in Henan, Jiangxi, Hunan, and other places due to unfinished buildings, Zhongxiu hurriedly suppressed public opinion. Under the pressure of the people’s struggles, they reluctantly agreed that buyers could stop repayment if the houses could not be delivered, but in practice, they sought ways to obstruct implementation. However, enabling workers and peasants to live in decent housing cannot be achieved simply by increasing the proportion of public rental and affordable housing or reforming pre-sale housing systems—other capitalist countries’ workers also find it difficult to buy their own homes with a lifetime of savings. Historically, followers of Proudhon even proposed radical measures such as abolishing housing monopolies (i.e., land private ownership) to make workers accept capitalist exploitation and oppression. In reality, land private ownership is just part of the private ownership of means of production, as Engels pointed out: “The only way to eliminate this housing shortage is to abolish all exploitation and oppression of the working class by the ruling class.” (From “On the Housing Question” by Engels)