Abstract: China’s property sector crisis — marked by heavy debt burdens, liquidity crunches, and regulatory clampdowns — poses systemic risks to its economy and offers important lessons for other rapidly urbanizing economies, notably India. This paper critically examines the root causes of China’s property downturn, including the “three red lines” policy, dependence on pre-sales and local-government revenue reliance on land sales. Through a review of public data, academic literature, and policy commentary, this research outlines both macroeconomic and micro-level implications. Key lessons for India include the importance of prudent leverage management, strong regulatory frameworks (e.g., escrow protection), demand-driven housing growth, and avoiding overdependence on land-based fiscal models. The paper concludes by offering policy recommendations for India to strengthen its real estate sector’s resilience, promoting sustainable growth while minimizing systemic risk.
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