China's $73 Trillion Wealth Shift! The End of the Real Estate Myth and the Surge into AI and Insurance

Goldman Sachs' newly developed quarterly household asset-liability tracking model shows that as of the first quarter of 2026, total household assets in China have stabilized at 730 trillion yuan (RMB, same below) after six consecutive quarters of decline. Behind this figure lies a historic structural transformation in Chinese household wealth.

For over two decades, real estate has served as the 'anchor' of Chinese household wealth, consistently accounting for roughly half of family assets. However, as the real estate market enters a period of deep adjustment, this decades-old wealth logic is facing severe challenges.

The End of the Real Estate Wealth Era and Asset Restructuring

Goldman Sachs' data clearly illustrates the depth of this transformation: at the peak of the real estate market in 2021, property accounted for about 67% of household assets; by the first quarter of 2026, this share had sharply declined to 52%.

In contrast, the proportions of cash deposits, stocks, and various financial assets are rising in tandem. With nominal property prices falling approximately 30% from their peak, a persistent negative wealth effect has been exerting long-term pressure on household consumption confidence and risk appetite.

Goldman Sachs points out that the engine of household asset growth has fundamentally shifted. Real estate has transformed from a 'growth pillar' into a 'drag' on balance sheets. Although the pace of price declines has slowed and stabilization is emerging in first- and second-tier cities, real estate's impact on consumer spending remains significant—over 90% of households own property, while only about a quarter of adults participate in equity markets.

This structural shift signifies the definitive end of an era in which wealth advancement relied solely on real estate appreciation.

The Deleveraging Cycle and Deepening Debt Pressure

Alongside asset reallocation, the household sector's deleveraging cycle continues. Although the household debt-to-GDP ratio declined to 59% in the third quarter of 2025—comparable to global levels—the core indicator of debt-to-disposable income stands at 140%, significantly higher than in major developed economies.

This stems from China's relatively low share of household disposable income in GDP, meaning that under equivalent debt levels, Chinese households face heavier cash flow repayment burdens.

Currently, both mortgage balances and short-term consumer loans are on a downward trend, with strong household incentives to repay loans early and persistently weak housing demand. Despite frequent policy stimuli—such as lower mortgage rates and consumption subsidies—the marginal effectiveness of these measures remains limited amid weak employment conditions and uncertain expectations. The long deleveraging cycle has yet to conclude.

Deposit Spillover and the Migration of Trillion-Yuan Savings

With the 3-year fixed deposit rate plummeting from previous levels to just 1.25%, the appeal of low-interest deposits continues to wane. Data clearly shows that deposit inflows into non-bank financial institutions are steadily rising, indicating that household funds are gradually shifting out of the banking system and into wealth management products, public and private funds, insurance, and stock markets.

Notably, a portion of these funds is being allocated to equity products focused on technology sectors such as AI computing, CoWoS packaging, GB200 chips, and domestic substitution.

Drawing parallels with Japan’s post-1990 real estate bubble collapse, Goldman Sachs emphasizes that the shift in household asset structure is not a sudden event but a gradual, decade-long process.

Chinese households are currently in the early stages of this transformation. Over the next decade, as real estate allocations continue to cede ground to financial assets, equity markets and the insurance sector will become the core vehicles absorbing these trillion-yuan-scale savings.