How is the decline in China's property sector affecting the middle class?

China's property sector is facing significant pressure due to high debt levels and insolvency among major developers, resulting in a 12.9% drop in property sales by floor area as of 2024. This decline is directly impacting China's middle class, for whom property income represents a crucial component of household earnings. As real estate underperforms, middle-class homeowners are experiencing asset depreciation, with rental income falling and property values decreasing. This financial strain affects overall household wealth and spending power, contributing to weakened consumer confidence in what has traditionally been a cornerstone of middle-class investment strategy in China.