Shanghai E-House Real Estate Research Institute’s Executive Director and Chairman of CRIC Group, Ding Zuyu, stated on December 31, 2024, that the sales volume and sales area of newly built commercial housing in 2024 decreased by 18% and 13% respectively compared to the previous year.
CRIC is a real estate consulting and information services company, the largest comprehensive real estate information service provider in China. According to reports on Caixin, Ding Zuyu predicted at the annual conference on the 31st that the national sales volume of newly built commercial housing in 2024 is expected to be around 9.6 trillion yuan, a decrease of 18% year-on-year; and the sales area is around 970 million square meters, a decrease of 13% year-on-year. Ding Zuyu’s forecast indicates that the sales of new commercial housing in 2024 may drop to below “double 10.”
The report noted that the liquidity crisis in the Chinese real estate industry has been ongoing for over three years, with the real estate sales scale in 2024 dropping to approximately the level seen in 2009.
Data shows that the sales scale of newly built commercial housing in China reached its peak in 2021. In the following two years, the real estate market continued to decline, with new commercial housing sales plummeting to “double 13” and “double 11.”
Ding Zuyu mentioned that in 2024, the sales scale of first-hand commercial residential properties shrank even more significantly. According to CRIC Research Center monitoring of 115 cities, it is estimated that the total transaction amount of first-hand commercial residential properties in 2024 will be around 4.7 trillion yuan, a decrease of 23% compared to the previous year; and the transaction area will be around 240 million square meters, a decrease of 24% year-on-year.
In order to stimulate the sluggish real estate market, the Chinese authorities introduced a package of real estate policies at the end of September 2024. These policies were reflected in the real estate market sales in October, but the positive effect was short-lived. A head of a leading real estate enterprise mentioned that after October, the “policy effect gradually weakened,” and although “the market sentiment warmed up after September, most cities have not shown clear signs of ‘bottoming out’ in house prices.”
A marketing executive from a local state-owned enterprise in South China revealed that their regional company achieved a peak in sales performance in October, with a completion rate exceeding 100%; in November, the sales performance decreased by over 25% month-on-month, with a completion rate of only around 70%; and in December, the decline in sales volume was significant, as “from December to now, daily transaction volume has decreased by around 10% to 15% month-on-month.”
According to a report on CNBC on January 2, 2025, due to the overall adjustment of the real estate industry, corporate cash flow pressures, and other factors in 2024, real estate companies’ investment intentions and attitudes were extremely cautious. According to CRIC data, the total amount of new store value for the top 100 real estate companies in 2024 decreased by 31% year-on-year, a 76% reduction from the peak in 2020.
CRIC pointed out that under the reduction in investment, the land acquisition pattern and strategies have remained unchanged. On one hand, there is a trend where “a few central SOEs dominate, many local city investment entities provide support, and private enterprises continue to be sluggish.” Among the top 10 land acquisition amounts, central enterprises accounted for half; on the other hand, focusing on high-tier cities has become the consensus for many enterprises, with over 90% of the investment amount in tier one and tier two cities. It is expected that in 2025, corporate investment will continue to maintain a cautious and differentiated trend.
By the end of 2024, real estate companies’ investment had declined for three consecutive years. In 2024, the new store value, total price, and total area of the top 100 real estate companies showed a year-on-year decrease of 31%, 31%, and 21% respectively, with the decline compared to the end of 2023 continuing to increase, particularly in the investment amount, which had already fallen by 76% compared to the peak in 2020.
Regarding the real estate trend in China this year, a senior executive from a listed central SOE analyzed to Caixin, saying, “Our company’s preliminary judgment is that in 2025, the national real estate market will continue to trend downward.” Especially in third and fourth-tier cities, there is a huge potential inventory, and even if policies are loosened, these cities will still require a longer time to absorb the stock.
Several real estate industry professionals also expressed that the fundamentals of the Chinese real estate market have not fundamentally improved, and there is a “temperature difference” between policy orientation and corporate sentiment.