China’s housing crash could set back millions of promising careers

HONG KONG - Ms Ivy Zhang figured she had it made.

Fresh out of school after studying chemistry, she joined one of China's biggest property companies in 2016, as the country's real estate market was taking off.

She worked until 11pm every day and was transferred to a bigger city after being designated a "sales champion".

She pampered herself in her limited time off by regularly buying US$550 (S$740) spa packages.

Money was so plentiful that she did not have to think about it much.

"The bank account was just a series of numbers," Ms Zhang said.

Everybody wanted what Ms Zhang and her colleagues were selling.

Owning property was so essential it was often a prerequisite for marriage. Prices never seemed to fall, so condominium units served the combined functions of wealth storage, insurance and retirement savings.

Real estate at one point accounted for about a quarter of gross domestic product (GDP), according to Bloomberg Economics. Some estimates were even higher.

But those heady days did not last.

Even though Chinese President Xi Jinping warned that "houses are for living in, not speculation", by 2021 developers were selling homes faster than they could build them and piling on debt in search of expansion.

When the government suddenly cracked down on borrowing, it all fell apart. Many home buyers were left waiting on stalled construction, sparking angry protests across the country.

Developers including Country Garden Holdings and the collapsed giant China Evergrande Group defaulted on bond debts. Government revenue plunged.

Images of tracts of empty buildings and uncompleted public works became global symbols of the nation's waning confidence and disgruntlement over Mr Xi's handling of the world's second-largest economy.

And a cohort of young professionals who thought they had found an escalator to China's affluent middle class had their lives upended.