China’s ghost cities: The story behind the country’s many empty towns of abandoned mansions

In a country as vast as China, the architecture is equally expansive: futuristic skyscrapers in Shanghai, imperial palaces in Beijing, traditional courtyard homes in Pingyao. China’s ghost cities were not supposed to be part of this composition—and yet, the nation has become infamous for a growing collection of half-finished developments.

Take the State Guest Mansions, a development envisioned as palatial homes for the upper crust of society. In 2023, the abandoned project received widespread media attention when AFP published a photo essay depicting the town’s only residents: herds of cattle meandering around the arched verandas and stone façades of hundreds of abandoned villas. Located near the hills of Shenyang (about 400 miles northeast of Beijing), the development was originally planned by Greenland Group, a Shanghai-based real estate developer, and broke ground in 2010. But as AFP reported, within two years, construction had come to a grinding halt, leaving the half-formed skeletons of imitative royalty in its wake. Today the crumbling estates are still abandoned, left in an eerie series of rows appearing like an architectural cornfield.

The year the AFP story came out, local farmers had begun plowing the land between villas for future crops. Would-be garages of the abandoned mansions were repurposed as storage for hay bails, and modest two-rail fences corralled herds of cows between properties. “These (homes) would have sold for millions—but the rich haven’t even bought one of them,” a farmer named Guo told AFP. All of this begs the natural question: Why?

A broader real estate crisis

The State Guest Mansions are just one of a number of deserted developments scattered around China, an occurrence that speaks to a growing real estate crisis in the country. Nearby is an abandoned high-rise complex, which Jonathan Cheng, a reporter for The Wall Street Journal, visited in February 2024 and documented in a video on the paper’s website. “This is just another of the residential property developments in Shenyang that have frozen in their tracks,” Cheng says, pointing at a collection of dozens of roughly 15-story buildings. With concrete frames and nonexistent windows, the buildings look like empty, oversized Brutalist doll houses waiting for someone to come sprinkle life into their interiors.

But like a toy cast aside long after a child grows up, it’s unlikely that the project will get picked up again. The complex was developed by China Evergrande Group, the country’s biggest residential real estate developer, which filed for bankruptcy in August 2023. In January 2024, a Hong Kong court ordered the company to liquidate, as it was unable to restructure the $300 billion that it owes to investors. According to The Wall Street Journal, about 800,000 of the company’s 1.2 million presold units remain unfinished.

What is causing China’s real estate problem?

China’s ghost cities represent a major problem with the country’s real estate market. For decades, the country’s economy was driven by real estate, so much so that the government often encouraged large-scale developments. But an aging population, affordability concerns, and the COVID-19 pandemic, among other factors, resulted in a supply-demand imbalance. Further, the Chinese government has been increasingly cracking down on developers’ reckless borrowing habits.

Evergrande’s collapse marked the beginning of China’s real estate troubles. Numerous developers are massively in debt, defaulting on payments, and struggling with losses, resulting in these unfinished housing projects and skeletal would-be communities. Greenland Group, the developer responsible for the State Guest Mansion, defaulted on $400 million worth of international bonds in 2024, Chen reported in the video. These issues have also caused many middle-class Chinese citizens to lose faith in the real estate market, further impacting demand and creating additional risks for the country’s broader economy. As Brookings, a nonprofit public policy organization and think tank based in DC, reports, many citizens have grown wealth through real estate, and 70% of family assets are stored in property. In 2023, Bloomberg put this statistic into startling context: “Every 5% decline in home prices will wipe out 19 trillion yuan ($2.7 trillion) in housing wealth,” the publication reported. Ultimately, this causes additional economic problems. When people lose money, they cut back on their spending accordingly, prompting further economic impacts.

What is the Chinese government doing to correct the crisis?

This year marks the fifth consecutive year of decline in China’s real estate market. In May, The New York Times went so far as to refer to the crisis as endless. “It’s pretty clear that they’ve reached a classic overbuilding boom-bust,” Kenneth Rogoff, an economist and the Maurits C. Boas chair of international economics at Harvard University, said in an April 2026 episode of the Brookings Podcast. “And the question is: How long [is it going to] last? How deep [is it going to] be? It doesn’t seem anywhere near the end.”

That said, the Chinese government has enacted several strategies over the past few years in an attempt to curb the cascading impacts of the ongoing crisis. In January 2026, the country reportedly dropped its “three red lines” policy, Reuters reported. These rules, which evaluated developers on three balance-sheet metrics, were what set borrowing limits for developers in 2020, triggering the collapse of giants like Evergrande. Separately, the government was also allowing banks to grant loan extensions for certain “whitelist” residential projects. To be considered, local governments must nominate eligible projects. Banks are encouraged to provide financing, and the hope is that it gives developers time and resources to complete unfinished projects.

This is only the latest in a series of tactics. In 2025, Beijing and Shanghai both eliminated all home-purchase restrictions for locals in non-central districts. In 2024, policymakers reduced down payment requirements and cut mortgage rates to boost demand among potential homebuyers.

Though there are slight signs of improvement, many economists are still predicting a long road to recovery. As The New York Times reported, in some cities like Shanghai and Shenzhen, the gap is closing between what landlords can charge for rent and mortgage payments. The former has also made it easier to borrow money through a municipal housing fund. Still, others are less optimistic.

“Other analysts dispute whether there are any real green shoots,” the paper reported. “Pointing to the estimated 90 million empty or unfinished apartments and to the long delays sellers face in finding any buyers at all.”