Inside China’s housing collapse as prices reach their lowest level in 20 years - and what it means for Australia
Chinese house prices have plummeted to their lowest level in 20 years, with real residential house prices declining 23% from their peak since Q3 2021. Australia's iron ore export earnings are forecast to drop due to reduced demand from China's struggling real estate market.
Chinese house prices have crashed to their lowest level in 20 years, with homeowners who bought in 2005 now in the red. Real residential house prices in China have declined 23% from their peak since Q3 2021, according to the Bank for International Settlements. The crash is ominous for Australia, as China is the largest buyer of Australia's top export, iron ore. Australia's iron ore export earnings are forecast to drop from $116 billion in 2024–25 to $107 billion in 2026–27. China's demand for steel peaked in 2020, driven by real estate, and reduced demand means lower prices, directly impacting the federal government's company tax revenue. Every USD $10 fall in the price of iron ore wipes out AUD $500 million in revenue.
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