Shanghai Middle Class Caught in Housing Nightmare of Plummeting Prices and Debt Pressure.

Entering 2025, the Chinese real estate market continues to plummet, leaving many homeowners trapped in a dilemma due to debt pressure, waves of layoffs, and market collapse. The middle class in Shanghai, in particular, is suffering endless agony from buying houses. More and more people are venting about the vicious cycle of the housing market, causing themselves great distress.

Recently, a video complaint from a 30-year-old homeowner in Shanghai went viral on social media. According to his account, he worked in the IT industry in Shanghai, with a monthly salary of 30,000 yuan. Wanting to settle down in Shanghai, he purchased a 95-square-meter three-bedroom apartment in Pudong, Shanghai, at a price of 5.8 million yuan with a down payment of 2 million yuan and a loan of 3.5 million yuan, setting his monthly mortgage payment at 19,631 yuan for 30 years.

However, in 2020, the internet industry began to cut salaries and lay off workers. The homeowner was included in the first batch of “optimization” list by his company. Months passed, and he couldn’t find a job that paid over 20,000 yuan a month. The pressure of a monthly payment close to 20,000 yuan along with living expenses became overwhelming for him. Unable to cope anymore, he decided to sell the house and move back to his hometown to start over, but his girlfriend, not wanting to leave Shanghai or burden him, broke up with him.

Subsequently, the homeowner approached a real estate agent to sell the house. He initially listed it at 6 million yuan, but after several months with no interest, the agent suggested reducing it to 3.5 million yuan due to the remote location and unfavorable market conditions. Hearing this, he was shocked by the 50% price reduction. Unable to cover the down payment and the monthly payments already made, he decided to default on the mortgage.

To his surprise, three months later, he received a court summons as the bank sued him. The judgment stated that he maliciously defaulted, violated the contract, and was required to pay a total of 120,867 yuan in related fees and fines. He had to repay the bank within a specified timeframe, with interest accruing if delayed, and he would be listed as a dishonest debtor by the court.

Overwhelmed, he couldn’t help but cry. He questioned why buying a house had led him to this dire situation. Couldn’t he just forfeit the loss of 2.47 million yuan? Wasn’t walking away from the house an option? Why force him into a dead end?

Many internet users expressed sympathy for the man but were at a loss for words.

A netizen named Cai Ge from Hubei on March 27 revealed that he bought a house in Shanghai for 2.2 million yuan in 2017. With business not doing well in Shanghai this year, he felt immense pressure and considered selling the house to return to his hometown in Hubei.

Cai Ge shared, “Yesterday, I listed the house with an asking price of 2.2 million yuan, at a price of around 26,000 yuan per square meter. The agent called me last night and said someone would come to view the house at 10 in the morning. The potential buyer seemed satisfied but didn’t agree on the price.”

He recounted how the buyer offered an insulting 600,000 yuan below his asking price, leaving him feeling extremely uncomfortable. Despite the current market downturn, with buyers pushing for only 1.6 million yuan, dropping the price per square meter to less than 18,000, he was stunned. The buyer left without saying more.

Cai Ge noted that his property had a prime location with nearby schools and convenient transportation, which used to fetch over 30,000 yuan per square meter. Reflecting on the situation, he felt that negotiating a 200,000 yuan cut might have been reasonable, but being forced to slash the price to 18,000 per square meter was unacceptable. He questioned who would be able to sell under such circumstances.

The trend of property prices varies across different regions of Shanghai, with significant differences between the central city and the outskirts.

A Shanghai resident named Mr. Wang mentioned the declining property prices in Shanghai. He mentioned that prices had dropped significantly in some neighboring areas. He heard about properties with prices starting at 100,000 yuan per square meter, dropping by 70,000 to 80,000 yuan, which he considered a possibility.

He remarked that the average property price in Shanghai used to be around 80,000 yuan per square meter, indicating significant potential for a price slash. The property in the Pudong Zoo area where he resides now sells at 28,000 yuan per square meter. In the neighboring newly developed areas in the past year or two, prices remain below 30,000 yuan per square meter. These areas do not offer educational advantages, yet prices previously hovered around 40,000 yuan per square meter. Thus, the current price decrease is not as severe for these areas.

The Shanghai Wild Animal Park is located in the suburb of Pudong New District, relatively far from the city center.

The Chinese real estate market continues to languish. Chinese Premier Li Keqiang, in the government work report during this year’s National People’s Congress, for the first time, included “stabilizing the property market” as a key directive, emphasizing the need to stabilize both the property market and the stock market, as well as to prevent and resolve risks and external shocks in key areas.

Despite several “stabilization policies” introduced by the Chinese government, the property market continues to decline sharply. The repeated emphasis on “stabilizing the property market” by official channels raises doubts on how effective this measure will be.

Mainland netizens believe that the significant downturn in the Chinese property market has led to a constant erosion of ordinary people’s household assets, causing a lack of confidence in the future and a reluctance to spend, resulting in a deflationary economic state.

At the end of last year, several credit rating agencies predicted a gloomy outlook for the Chinese real estate market. Goldman Sachs warned of a potential further 20% to 25% drop in property prices, attributing this decline to the accelerating urbanization process, dwindling demographic dividend, and the government’s continued regulation of the real estate market, which has dampened price increases.

Goldman Sachs also pointed out that the total debt of China’s real estate sector amounts to a staggering 59 trillion yuan. With annual interest expenses reaching trillions of yuan, the financial pressure on developers is immense.

Morgan Stanley also indicated that the Chinese property market will continue to decline in 2025, with property prices likely to drop by around 9%.

Blogger Wu Ge stated on March 28 that during the 2016 property buying frenzy, national property prices continued to soar, driven by a market imbalance due to panic buying and the market’s voracious appetite engulfing rationality. Almost any property, regardless of quality, could fetch high prices. However, as of 2023, the real estate market shifted into a bear market, with Shanghai experiencing two consecutive years of falling prices, especially for old properties and those in the outskirts. Many homeowners still held onto unrealistic price expectations, making it impossible to sell even after reducing prices significantly.

Wu Ge pointed out that some envy the unbelievably low property prices in Heilongjiang’s Hegang. Some managed to buy a 70-square-meter house for just 40,000 yuan. However, these seemingly bargain properties often turn out to be pitfalls. With severe population outflow, unfavorable climate, single-industry focus, and aging demographics, such contraction-type cities end up depreciating even if initially bought for pennies. Similarly, in Shanghai, certain properties in the outer suburbs (such as Baihe, Yuepu, and Fengxian Bay) lacking in planning, industry, and population struggle to appreciate in value and may remain stagnant for a long time.

He emphasized that the marginal areas outside Shanghai lack planning, industry, population, and solid industrial foundations. Despite numerous constructions, in areas without subway access, prices have remained stagnant for a decade. He urged young people not to fall into the trap of low-priced properties, even if they couldn’t afford better options.

(Contributions to this article by Epoch Times reporter Luo Ya)