China’s real estate market continues to be in a slump, with stimulus policies across various regions showing minimal impact as property developers face continued sales pressure. The latest data shows that the sales of the top 100 real estate companies in April decreased by 12.9% month-on-month and 45% year-on-year.
On the evening of April 30th, data released by market research firm Kerui showed that the top 100 real estate companies achieved a total sales volume of 312.17 billion yuan in that month, marking a 12.9% decrease compared to the previous month and a significant 44.9% drop year-on-year, with monthly performance remaining at historically low levels.
According to historical data from Kerui, the monthly sales volumes of the top 100 real estate companies in April for the years 2021 to 2023 were 1.036 trillion yuan, 430.63 billion yuan, and 566.54 billion yuan, respectively. The current sales performance of the top 100 real estate companies is less than one-third of that in 2021.
In the first four months of this year, the accumulated sales volume of the top 100 real estate companies amounted to 1.09141 trillion yuan, representing a year-on-year decrease of 46.8%.
Kerui predicts that the total transaction volume in May may continue to fluctuate at low levels, with the volume likely to remain similar or slightly decrease compared to April. However, due to the higher base in the previous year, the year-on-year comparison is expected to show a continued decline. In terms of market segmentation, it is highly probable that the overall heat in first-tier cities will be better than that in second and third-tier cities.
Furthermore, according to Caixin, the investment strategy of the vast majority of real estate companies at present focuses on “selling properties to determine the land,” with land acquisition being extremely cautious.
A senior executive of a real estate company revealed that in a normal year, the land acquisition-to-sales ratio for conservative real estate companies is usually set at 40%, while some companies aiming for expansion may increase the ratio to between 40% and 60%. However, currently there are very few companies exhibiting such strength in land acquisition.
Guangda Securities has been tracking ten real estate companies that are still operating normally, including Poly Developments, Vanke Group, China Merchants Shekou, Jinke Group, New World Holdings, Binjiang Group, Yuexiu Property, Longfor Group, China Overseas Development, and China Overseas Grand Oceans Group.
A research report by the institution on April 23rd indicated that in the first quarter, the total land acquisition amount of these ten companies was 35.5 billion yuan, down 49.4% year-on-year; with an overall land acquisition-to-sales ratio of only 10.8%, a 1.2 percentage point decrease compared to the same period last year.