Imagine the common stocks of residential real estate developers D.R. Horton or Lennar Corp dropping 98%. What would that imply for US real estate? Back in 2022, our Global Market Perspective warned that China real estate developer Country Garden Holdings “is becoming a bellwether of contagion risk.” Here’s a June 2025 GMP update:
Country Garden shares hit a new all-time low of 38 cents a share this week, down 98% from its January 2018 peak:
The continued bearish potential is accentuated by calls for an imminent restoration of the Chinese housing boom. In recent weeks, for instance, The South China Morning Post finds a “more upbeat tone among property analysts.” When five repossessed homes recently sold at auction for multiples of the minimum bid, a Chinese news service called the “Sky-High Bids for Foreclosed Homes” a “Hint at a Real Estate Rebound.” One of the many bullish voices on China’s housing market holds that a “cocktail of conditions” will drive the “structural property market recovery.” The South China Morning Post attributes this “positive mood” to a “broader reassessment of China’s economy.” We rate this as too much optimism, too soon.
Are the Chinese and U.S. real estate markets linked? Learn about the Fear of Getting Out (FOGO) by following the link below.
If you’re not ready for a subscription, you can still get more samples of our Global Market’s analysis. Follow this link for FREE access.