Facing the continued decline in the real estate market and financial pressures, central and local state-owned asset platforms are now joining the ranks of banks in a massive wave of listing and selling their properties. This wave of sales, led by state-owned entities, not only significantly increases market supply but is also seen within the industry as a blow to the long-standing “faith” in the real estate market, signaling an overall shrinkage in asset prices.
Recent data shows that the efforts and scale of state-owned asset platforms in selling properties have far exceeded the past. The types of properties being offered are diverse, covering residential, commercial properties, office buildings, and parking spaces, with many properties listed at significantly lower prices than the market rates.
On November 14, Guizhou Dacheng Construction Development Co., Ltd. listed properties for transfer in Chongqing, Jiangmen, Anshun, and 11 other locations with total prices ranging from 220,000 to 730,000 yuan. Most of the properties are vacant, with deposits ranging from 60,000 to 300,000 yuan.
On November 6, a company in Xichang, Sichuan, auctioned off 144 sets of state-owned property residential housing units at prices significantly lower than market rates, with some properties discounted by over 20%. On November 5, the Fuzhou Public Resource Trading Network announced the public auction of 51 marketable properties in Changle District, Fuzhou, scheduled for November 21.
Furthermore, in various places such as Guangzhou, Yantai, and Zibo, there has been a phenomenon of state-owned platforms listing properties for sale, involving entities like Guangzhou Airport Construction Investment Group, Guangzhou Metro Group, including properties, shops, and parking assets. The scale of these actions far exceeds previous activities.
Since the beginning of this year, Beijing’s Xicheng District state-owned Tianheng Real Estate Group listed 111 properties at once; Jilin Bank listed over 2,000 properties, and China Guangdong Nuclear Power Engineering Co., Ltd. put up for sale 68 properties in Dalian.
The mass selling of properties by state-owned entities in multiple regions has drawn significant attention from the industry and the general public.
A report from Economic Daily News on November 19 quoted Li Yujia, Chief Researcher of the Housing Policy Research Center of Guangdong Provincial Institute of City Planning, analyzing that under the current downward pressure in the real estate market, the main suppliers of housing have expanded from traditional developers and existing homeowners to physical enterprises, listed companies, government platforms, among others. The continuous increase in listings in the secondary market, price decline, and prolonged transaction cycles (Beike data shows that the transaction cycle for selling existing homes is mostly around six months) might create certain disruptions on the market due to the cumulative effect of the multiple suppliers.
Whether it is banks or state-owned platforms, the core driving force behind this large-scale selling spree is liquidity and debt pressure.
Blogger “Fishing Brother with Ma Listings” pointed out in an article that the most distinctive feature of the current real estate market is no longer a game between buyers and sellers but an internal competition among sellers. Apart from banks, the main actors in this wave of sales are local state-owned entities holding a large number of high-quality assets.
Banks have long been core members of the real estate market sell-off team. With the contraction of their loan business and the continuous decline in interest margins, banks’ profit margins have been squeezed, exacerbated by individual defaults and bad debts from real estate developers’ loans, leading to a large number of foreclosed properties. These properties, mostly under foreclosure due to homeowners’ defaults and seized by the courts, are priced 10%-15% lower than neighboring secondary market prices, serving as price killers in the market. The impact of state-owned entities’ sales on the local market can be significant.
The article mentions that whether it is banks or state-owned entities, the core driving force behind this large-scale selling spree is, in fact, debt pressure. Though the situations of different entities may vary, the underlying logic is highly consistent.
Financial blogger “Liu Da” stated that both banks and state-owned entities selling properties indicate that housing prices are likely to fall further. Failing to quickly sell off properties now, which are already difficult to sell, may result in even harsher declines in the future. The issue lies in the fact that now, with properties already challenging to sell, the only option for quick liquidation is to sell at a loss.
“Liu Da” pointed out that state-owned entities selling properties will bring about three irreversible and profound impacts:
First, there will be a stampede-style decline on the supply side. Many of the properties being sold off this time are high-quality properties held by local state-owned entities. These include residential properties, office buildings, and commercial properties in core locations, often processed in bundled deals and sold at discounted prices. This sudden increase in the supply of second-hand and foreclosed properties will strike a blow to individual sellers in the same region. They are no longer just another small-scale seller seeking high prices but a behemoth focused solely on rapid liquidation, ultimately squeezing out premiums in the region.
Second, the market’s anchor of confidence is starting to waver. The real estate market had a solid anchor of “faith” in the past – that the government would not let housing prices fall. However, with local state-owned entities now actively selling properties at discounts, this anchor of faith is starting to loosen or even shift. This will make potential buyers and investors reconsider a fundamental question: if even state-owned entities are retreating, why should they step in? This psychological impact is more profound and far-reaching than any policy-related restrictions such as purchase limits or credit constraints because it shakes the basic faith in the market.
And third, this will push other institutions to follow suit, leading to a chain reaction. After a significant price drop in state-owned asset sales, institutions holding large amounts of properties in the market, such as trust companies, private equity funds, or speculative investors with high leverage, will have to reassess their balance sheets. They will realize that if they do not sell now, prices will drop further. Consequently, they too will join the sale, creating a chain reaction that accelerates the bursting of the asset bubble, bringing prices back to their realistic utility value. This process is known as “market clearance.”
In summary, “Liu Da” explained that the real estate sector’s debt defaults generating bad debts, banks selling properties sparking price wars, and state-owned platforms joining in the massive sell-off are collectively catalyzing a stomp on the secondary housing market and a spiral decline in prices, making the comprehensive reduction in asset values an irreversible trend.