On November 10, 2025, a mother of three in Luoyang, Henan Province, China, shared a heartfelt account of her family becoming burdened by their mortgage, despite thinking that owning a house would bring stability to their lives. This sheds light on the harsh reality faced by numerous urban Chinese families today.
The family, represented by the social media user “Three Treasures Mom,” talked about the transition from viewing homeownership as synonymous with stability to realizing that it has become a heavy burden on their daily lives. Balancing expenses such as children’s education, childcare, formula, and caring for elderly parents, they struggle under the enormous pressure of mortgage repayments, household chores, childcare, and supporting the family.
It makes one wonder, “If we hadn’t impulsively bought a house back then, would our lives be much better now?” This question reflects the deep anxieties and pressures faced by many middle-class families who have made significant financial commitments to own a home.
The story of “Three Treasures Mom” and the anxiety she expressed resonates with many families in China who bought homes at high prices. In recent years, with the continuous decline in housing prices in China, many homebuyers have taken to social media to express their frustrations over significant losses in property value.
Recently, a real estate agent in Shenzhen showcased a case of “selling houses with loans” on social media, bringing public attention to the phenomenon of “mortgage inversion.” This refers to the situation where the market value of a house falls below the total remaining loan amount (principal + interest) owed to the bank, a troubling trend for many homeowners.
A financial blogger with 6.96 million followers, Wu Wei, stated on November 9 that the golden age of the real estate market in China has ended. She emphasized that houses should be seen as long-term assets for living rather than short-term tools for wealth accumulation.
Wu Wei pointed out two unprecedented phenomena in the Chinese property market this year: “mortgage inversion” and bank-directed property sales, where banks sell mortgaged properties at lower prices due to rising risks of non-performing loans.
The decline in housing prices has been significant, with secondary housing prices in a hundred Chinese cities dropping by 7.60% year-on-year in October 2025. Some cities have seen prices fall back to levels last seen in 2017, with declines exceeding 40%.
Wu Wei highlighted that the period from 2018 to 2021 marked the peak of housing prices in China. Many families, enticed by low down payments and high leverage, are now facing immense pressure as prices fall, becoming the first to bear the brunt of these economic challenges.
The speed of the housing price drop has surpassed the pace of loan repayment, leading to a situation where homeowners may find themselves with assets in negative equity or even financial liabilities.
For example, a homeowner in Shenzhen, born in the 1990s, revealed that the value of her apartment purchased in 2020 for over 6.5 million yuan is now valued at only 3.6 million yuan, nearly half of the total loan amount.
Another homeowner facing mortgage inversion, named Chen, shared a poignant account of his struggles. He bought a property for 2.35 million yuan in 2019, with a total loan amount of 3.4624 million yuan, having paid over 600,000 yuan so far. His current outstanding loan balance is 1.436 million yuan, and with reduced income, he is looking to sell the property at a loss.
Wu Wei warned that mortgage inversion and defaults are not inevitable consequences but result from a combination of reduced income, high leverage during purchase, and ongoing price declines. These present hidden risks for many middle-class families facing a potential crisis where mortgage burdens could turn into negative asset situations.
As of the first half of 2025, the non-performing loan ratios of ten banks have exceeded 1%, and some even surpassed 4%, nearing the regulatory redline. To expedite the recovery of funds in the face of plummeting property prices, banks have resorted to direct property sales, offering discounts to attract buyers.
The downward spiral of the property market poses challenges not only for families facing wealth shrinkage but also for banks assessing the quality of their assets. Wu Wei reiterated the warning that the era of real estate as a wealth generator has passed, urging families not to exhaust all their resources to buy homes via loans.
Flexibility in employment and unstable incomes are becoming risk factors for potential buyers. Additionally, demographic shifts, including a decrease in the young population and declining marriage rates, mean that the demand for new home purchases is unlikely to rebound soon, leading to structural reasons for continued housing price declines.