China’s mainland real estate market is currently facing an “avalanche,” with authoritative data showing that the sales amount of the top 100 real estate enterprises in August plummeted by 17.6% year-on-year. Despite stimulus policies being rolled out in major cities like Beijing and Shanghai, market demand remains weak. This prolonged downturn of over four years has not only shaken the foundation of the Chinese economy but also exposed countless families to the risk of wealth erosion.
According to data released by “CRIC Real Estate Research” on August 31 on their official WeChat account, the top 100 real estate companies achieved a total sales amount of 207.04 billion yuan in August, a decrease of 1.9% from the previous month and a significant 17.6% decrease year-on-year. The monthly performance has been lingering at historically low levels, marking the sixth consecutive month of decline in sales amounts for the top 100 real estate companies.
“CRIC Real Estate Research” reported that cumulatively this year, the top 100 real estate companies achieved a total sales amount of 2.7088 trillion yuan, a 13.1% year-on-year decrease with the decline expanding by 0.6 percentage points.
Recent data from the “China Index Research Institute” indicates a continued phenomenon of “price in exchange for volume” in the second-hand housing market. In August, the average price of second-hand residential properties in one hundred Chinese cities fell by 0.76% month-on-month and 7.34% year-on-year. The price decline was more significant in first-tier cities by 0.55% month-on-month and 4.17% year-on-year, while second and third-fourth tier cities saw price declines of 0.85% and 0.78%, respectively, with a slight increase in the decline rate. Of 0.01 percentage points year-on-year, reaching 8.14% and 7.78%, respectively.
The continued drop in housing prices has exacerbated concerns about monetary tightening in the market. Bloomberg reported that the effects of the stimulus measures introduced by the authorities a year ago are diminishing, indicating that mere policy tools are struggling to reverse the downward trend.
Financial blogger “Huihu” commented on the alarming data regarding the housing market, stating that the sales data for July was already historically low, and the decline in August further expanded, reaching a 17.6% year-on-year decrease. The upcoming political meetings of the Chinese Communist Party in September are being closely monitored, as decisions made during these meetings could have a significant impact on the economic situation.
Looking at a series of real estate data, the most notable trend in 2025 is the decline in first-tier cities, which have started leading the country in terms of both sales amount and price reductions, becoming the cities with the fastest declining housing prices and reduced transaction volumes nationwide.
In August, the new housing transactions in Shanghai witnessed a month-on-month decline of 27% and a year-on-year drop of 45%. This dramatic downturn in Shanghai, once a leading city in the national property market, has now become the weakest link.
In recent times, various regions in China have implemented new real estate policies. For example, Beijing and Shanghai have loosened restrictions on property purchases, allowing qualified buyers to purchase an unlimited number of properties outside the fifth ring road in Beijing and outer ring road in Shanghai. Single adults are now subject to family-based purchasing restrictions, and Shanghai has unified its pricing mechanism for both first and second homes. Suzhou has also recently lifted sales restrictions.
However, “Huihu” believes that the entire housing market in the Yangtze River Delta region is experiencing a seismic shockwave. The avalanche effect triggered by Shanghai’s market collapse will ripple through the Yangtze River Delta first, followed by spreading to the outskirts. He even predicts that in the remaining four months of this year, there could be a massive wave of forced property sales, with the potential for a cascading effect leading to a significant drop in house prices in major cities.
Beijing blogger “Nervous Cola Cake,” who previously worked in the exhibition industry as an IT professional, lost his job due to the real estate downturn. He highlighted the critical role of the real estate sector as a pillar of the national economy and its deep decline as the primary cause of the current economic contraction in China, wreaking havoc on numerous upstream and downstream industries.
He emphasized that during the period of rising property prices five to ten years ago, various industries thrived. With the real estate industry constituting a significant portion of the national GDP and providing a vast number of employment opportunities, the industry’s profound downturn has inevitably led to an economic slowdown, now the primary reason for the current economic contraction.
He shared a poignant story about a colleague who now works as a food delivery rider. Once a department head in their workplace, this individual and his wife are struggling to make their 20,000 yuan monthly mortgage payments for their two children. His company closed down, and his wife, working at a state-owned design institute, has not received a salary for six months. They have no choice but to deliver food to earn some money. A friend of the colleague, who worked in an architectural design institute, asked how much he earns from food delivery. The response was disheartening, mentioning the number of educated individuals now working as delivery riders. This colleague lamented that the comprehensive impact of the real estate crisis has affected every aspect of life.
He also pointed out that while the government encourages people to consume, it’s essential to understand that the primary reason for the weak consumption environment is the pessimism regarding the future among the general public, including concerns about employment, retirement, and healthcare. This preventive saving behavior, known as “precautionary savings,” has become a prevalent practice due to the uncertain economic outlook.