When the housing dream shattered
September 1, 2026
To what extent is Evergrande (恒大) responsible for the collapse of China’s housing market?
Heavy punishment of the market leader
On August 20, China sentenced the founder of the country’s biggest property developer Hui Ka-yan to life imprisonment, with political rights stripped for life. All personal assets were confiscated.
Hui pleaded guilty to large-scale financial fraud, asset embezzlement and corporate bribery, illegal fundraising and absorption of public deposits. The court also fined the Evergrande Group RMB15.82 billion or S$3 billion. A day later, the court accepted Evergrande’s liquidation petition.
This marks an important milestone of President Xi Jinping’s plan to bring down the big bosses of the real estate industry.
Who popped the housing market bubble?
The Chinese authority started tightening borrowing to cool the property market from mid-2017. This forced developers to issue bonds overseas. It was the time when any investment related to China or real estate were regarded as “hot”. The China property bubble quickly ballooned to $52 trillion.
In August 2020, President Xi imposed the three red lines on credit ratings. Most developers failed and were forbidden to borrow. The cashflow problem triggered the collapse of the real estate... read more