China’s Real Estate Meltdown Triggers Desperation and Superstition Amid Surplus of Unsold Homes

Economic

Summary:

Faced with plummeting home prices and 80 million unsold units, Chinese homeowners are turning to superstition to reverse their fortunes as market confidence collapses and policy interventions fail to stem the decline....

An Overcrowded Market and the Rise of Desperation Rituals

China’s real estate market remains engulfed in a prolonged crisis now entering its fifth year. With an estimated 65 to 80 million vacant homes across the country, property owners particularly in major cities like Shanghai are increasingly turning to spiritual and superstitious practices in hopes of attracting buyers. These range from praying at temples and touching Buddhist statues to placing red paper charms inscribed with phrases like “already sold” on their doors.

Such symbolic efforts underscore the psychological toll of a deepening housing glut. In one viral case, a homeowner claimed she found a buyer after visiting Jing’an Temple and touching a Buddha statue, prompting a flurry of copycat hopes online. The widespread posting of “house-selling charms” on social media platforms like RedNote reflects how even the educated urban population is resorting to non-economic solutions in the face of economic paralysis.

Continued Price Declines and Seller Losses

Old home prices across 70 major cities have fallen for over three consecutive years. In October 2025, the average price declined 5.4% year-on-year and 0.7% from the previous month. In major urban centers, private data suggests steeper declines. For example, in Shanghai, home prices have returned to 2016 levels, effectively erasing a decade’s worth of value appreciation.

The situation has worsened for sellers. Many must slash asking prices by an additional 5% to 10% before securing offers. A notable case involved a 37 square meter apartment in Shanghai originally bought for 2.01 million yuan in 2018 (tax included), which finally sold for just 1.1 million yuan in October 2025 a 44% loss. Another seller dropped their price repeatedly from 3.2 million yuan to 2.4 million within a year, lamenting a missed opportunity when prices were more stable.

This trend indicates a causal relationship between prolonged listing duration and price depreciation. The longer a property remains unsold, the greater the pressure on the seller to reduce the price, thus fueling further market pessimism.

Policy Interventions Have Limited Impact

Despite over 510 local housing market support measures launched in 2025, including the removal of purchase restrictions in cities like Guangzhou, Beijing, Shanghai, and Shenzhen, demand remains stagnant. Buyers remain hesitant amid expectations of further price drops, weakening the effectiveness of these measures.

The central government’s original “three red lines” policy implemented in late 2020 to curb excessive developer debt has contributed to the crisis by limiting liquidity for developers. This has resulted in delays in project completion and mounting financial strain across the industry. Even large-scale monetary and regulatory relaxation, such as potential mortgage subsidies or tax relief currently under consideration, has failed to reverse the prevailing market sentiment.

Experts, including analysts from Nomura, argue that while these efforts may temporarily stabilize some regions, they are insufficient to offset the structural decline in demand and the overhang of unsold properties. This suggests a correlational limitation: policy adjustments alone, without a shift in household confidence or economic fundamentals, cannot sustainably revive market momentum.

Developer Competition Worsens Outlook for Secondary Market

Adding to the woes of existing homeowners is the aggressive pricing strategy of property developers. New housing units often feature superior designs, larger living spaces, and lower prices, intensifying competitive pressure on the secondary market. This supply-side evolution further reduces the attractiveness of older properties, contributing to prolonged sales periods and larger discounting.

Real estate agent You Liangzhou reports that listings of older homes in Shanghai have more than doubled in recent years. Fellow agent Song Yulin observes that unless sellers offer steep discounts, it typically takes three to six months to close a deal if at all.

Superstition as a Coping Mechanism and Market Mirror

While the increase in ritualistic behavior may seem anecdotal, it mirrors a deeper economic and social malaise. Sellers exhausted by price drops and stagnant demand are turning toward superstition not out of belief in its effectiveness, but as an emotional release and final hope. Some have posted “sold” charms only to secure a deal days later, while many others report no inquiries despite extensive symbolic efforts.

The social media landscape, filled with images of charms and prayers, functions both as a support network and a testament to shared despair. Sellers post not only their wishes but also their regrets and failed attempts, revealing a collective emotional narrative of loss, uncertainty, and hope against hope.

China’s real estate crisis is no longer just a financial dilemma it has become a cultural phenomenon exposing the fragility of market trust. Despite policy support and minor rebounds, the weight of unsold inventory, price depreciation, and consumer pessimism is overwhelming. As newer properties undercut older ones and economic conditions remain uncertain, sellers are increasingly stranded, forced to reconcile tangible financial loss with intangible hope. Superstition, in this case, is not merely belief it is a last resort in a market where reason has yielded to resignation.

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