Data highlights: China's total household assets peaked and began declining in early 2023, stabilized at 730 trillion yuan by the first quarter of 2026 after six consecutive quarters of contraction; the share of real estate allocation fell sharply from a peak of 67% in 2021 to 52%, while cash deposits and financial assets rose in tandem.

Trend assessment: The household sector's deleveraging cycle continues, with a debt-to-income ratio of 140% suppressing consumption, and savings capital is migrating over the long term from real estate and low-interest deposits toward equities, insurance, and computing-power-related financial assets. The transformation remains at an early stage.

Biggest winners: Mid-to-long-term equity markets and the insurance sector will absorb trillions in incremental household capital. By 2035, the household equity allocation ratio is expected to double to 11%, and insurance asset allocation is projected to rise to 10%, with roughly 6 trillion yuan in new long-term allocation capital added annually.

Why the market is suddenly paying attention

For more than two decades, real estate has been the core vehicle for Chinese household wealth, consistently accounting for more than half of total family assets. Home prices have fallen about 30% in nominal terms from their peak, persistently creating a negative wealth effect that suppresses household consumption confidence and risk appetite.

Household balance sheet data published by the central bank and the National Institution for Finance and Development lags significantly (the latest public annual data only goes up to 2022), leaving the market without a high-frequency tracking framework to observe real-time changes in household wealth structure, leverage, and capital flows, making it difficult to predict the long-term impact of trillion-yuan savings reallocation on capital markets, the computing power industrial chain, and domestic consumption.

Goldman Sachs has built a quarterly household balance sheet tracking model covering four major sectors: financial assets, real estate, automobiles, and household liabilities. This fills the real-time data gap, provides a complete review of the three stages of household wealth expansion since 1978, and benchmarks against the U.S. and Japanese real estate downturns to forecast a decade-level structural inflection point in domestic asset allocation.

What Goldman Sachs sees as "expectation gaps"

Expectation gap 1: The household asset growth engine has completely switched, with real estate shifting from a growth pillar to a drag.

At the peak of the property market in 2021, household asset structure was: real estate 67%, cash deposits 16%, other financial assets 15%. By the first quarter of 2026, the structure was reshaped to: real estate 52%, cash deposits 25%, other financial assets 20%, with direct household stock holdings rising slightly from 5% to 6%.

After the policy pivot in September 2024, equities and various financial assets became the core drivers of total asset growth, offsetting the asset shrinkage pressure from real estate valuation declines and ultimately stabilizing the 730 trillion yuan in total household assets.

The report makes clear: the wealth effect of real estate is far stronger than that of stocks, with over 90% of families owning property and only 25% of adults participating in equity markets. The weakening of real estate hits mass consumption, while the appreciation gains from computing power, stocks, and other financial assets are concentrated only among high-income groups.

Expectation gap 2: Deep household deleveraging continues, and the core pain point of debt pressure is not GDP but disposable income.

The household debt-to-GDP ratio fell to 59% in the third quarter of 2025, lower than the U.S. at 70% and Japan at 62%, but higher than the emerging market average of 45%. However, the household debt-to-disposable-income ratio stands at 140%, significantly higher than major developed economies.

The core reason: China's household disposable income accounts for only about 45% of GDP, compared with 75% in the U.S. At the same debt scale, Chinese families face greater cash flow pressure for debt servicing.

The liability side continues to contract: mortgage loan balances and short-term consumer loans are declining in tandem, with households actively prepaying mortgages and home-buying demand remaining weak. Although policies have lowered mortgage rates and introduced consumer loan interest subsidies, the weak employment environment and insufficient confidence have limited the effectiveness of credit stimulus, and the deleveraging cycle has not ended.

Expectation gap 3: Continuously falling deposit rates are forcing savings to spill over into funds, wealth management products, equities, and computing-power-related financial products.

Three-year fixed deposit rates have fallen from 2.6% in 2023 and 1.95% in early 2024 to the current 1.25%, with the spread between long-term and short-term deposit rates narrowing to 30bp, making low-interest deposits increasingly unattractive.

High-frequency data shows that quarterly increments in deposits at non-bank financial institutions continue to rise, representing household capital shifting from bank deposits to wealth management products, public funds, private funds, insurance, stocks, and other risk assets, including a large number of equity products positioned in AI computing power, CoWoS, GB200, and domestic substitution tracks.

Comparing with Japan's experience after the real estate bubble burst in the 1990s: after home prices declined, Japanese households stuck to cash deposits for a long time, and risk appetite recovered extremely slowly. China's current capital shift is only at an early stage and will not complete a full switch quickly in the short term—it is a gradual structural transfer spanning a decade.

Expectation gap 4: The real estate drag is easing at the margin, but city divergence is significant, with first- and second-tier cities stabilizing first.

High-frequency transaction data for new and second-hand homes is gradually stabilizing, the month-on-month decline in 70-city home prices is narrowing, and new and second-hand home prices in first-tier cities have already shown month-on-month increases. Goldman Sachs forecasts that over the next one to two years, home prices in first-tier and strong second-tier cities are expected to stabilize locally, with Shanghai and Shenzhen leading the recovery.

If home prices stabilize without external shocks, it will restore household risk appetite, release more savings capital into computing power, equities, insurance, and other financial markets, and alleviate the negative wealth effect that has been suppressing consumption.

Trillion-yuan savings reallocation and long-term beneficiary track space projections (market structure and incremental space)

1. Long-term household asset class share projections (2026-2035, ten-year horizon)

Report baseline scenario projections: Real estate: currently 52%, falling to 42% by 2035, with housing demand slowing and home prices growing moderately, continuously ceding allocation share. Direct household stock holdings: currently 6%, growing at an average annual rate of 10%, rising to 11% by 2035; combined with indirect holdings through public and private funds, the overall equity incremental space is even larger, with computing power and semiconductor domestic substitution tracks continuously absorbing incremental capital. Insurance assets: currently a low share, rising to 10% by 2035, with roughly 6 trillion yuan in new allocation capital annually, combining long-term savings and protection attributes, making it a core mid-term incremental track. Cash deposits: allocation share remains broadly stable overall, with precautionary savings demand persisting over the long term.

2. Long-term growth space comparison for the insurance track

China's insurance depth (insurance scale/GDP) is significantly lower than that of OECD countries, the U.S., and Japan. In developed markets, insurance and pensions are the core vehicles for household long-term savings, and the domestic track has long-term room to catch up, jointly absorbing trillions in household capital flowing out of real estate alongside the equity market.

3. Global household asset allocation reference framework

More than three decades after Japan's real estate bubble burst, Japanese households have long maintained cash deposits at over 30% of total assets, with risk asset allocation willingness recovering slowly. After the 2008 U.S. subprime crisis, financial wealth recovered slowly, but the middle class remained heavily invested in real estate, with risk asset appreciation concentrated among high-net-worth individuals.

Benchmarking against overseas history, the process of Chinese households shifting from real estate to computing power, equities, and insurance will not happen overnight; the pace will be gradual and the stratification obvious, with high-net-worth groups taking the lead in increasing allocations to equities and computing power tracks.

Final thoughts

Goldman Sachs' quarterly tracking model clearly outlines a decade-level structural inflection point in Chinese household wealth: the real estate era is ending, and the financial asset cycle is beginning. During the internal rebalancing of 730 trillion yuan in total household assets, trillions in savings continuously flowing out of low-interest deposits and real estate will gradually flow into the two main lines of equities and insurance, while high-quality growth tracks such as computing power, semiconductor domestic substitution, and AI hardware (HBM/CoWoS/GB200) will continue to receive long-term support from incremental household capital.

At the same time, the constraints are clear: high household debt-to-income ratios, weak consumption confidence, and the long-tail effects of real estate adjustment determine that capital transfer is a slow, gradual process, with no short-term one-off mass migration of funds. The pace of stabilization in first-tier property markets will become a key variable affecting household risk appetite and the pace of capital entering the market.

From a macro balance sheet perspective, this round of household wealth restructuring is one of the most core underlying macro logics for capital markets and technology computing power tracks over the next decade.