In 2024, the Chinese authorities continued to introduce policies aimed at boosting the property market, but they have not reversed the ongoing decline in the real estate market. According to statistics, from January to October this year, the total sales of the top 100 real estate companies in China decreased by more than 30% compared to the same period last year. In the first three quarters of this year, more than half of the 72 listed real estate companies in Shanghai and Shenzhen reported net losses.
2024 has seen two rounds of policies to support the Chinese real estate market, known as “5.17” and “9.26.” During the “9.26” Communist Party Politburo meeting, it was emphasized to “promote the stabilization of the real estate market to prevent further decline,” showing a significant increase in policy efforts.
However, recent analysis by the China Index Research Institute based on the quarterly performance of 72 listed real estate companies in Shanghai and Shenzhen shows that in the first three quarters of this year, both operating income and net profits continued to decline, with tight short-term cash flow leading to increased pressure on short-term debt repayment.
In terms of operational performance, the average operating income of listed real estate companies in Shanghai and Shenzhen in the first three quarters of this year was 162.6 billion yuan, a decrease of 21.1% compared to the previous year. The average net profit dropped from 8.4 billion yuan in the same period last year to -1.6 billion yuan this year, resulting in losses.
Looking at the financial data of the 72 listed real estate companies in Shanghai and Shenzhen, 75% of companies experienced a year-on-year decline in operating income, with 53% reporting losses in net profit.
For example, Vanke reported a net loss attributable to shareholders of the listed company of 17.94 billion yuan in the first three quarters; Poly Developments saw a net profit attributable to shareholders of 7.81 billion yuan, a year-on-year decrease of 5.1% and 41.2% respectively; Dahua City reported a net loss attributable to shareholders of -590 million yuan, a 16.7% decrease year-on-year, and a net profit attributable to shareholders of -1.63 billion yuan after deducting non-recurring gains and losses, a 187.4% decrease year-on-year.
From January to October this year, the total sales of the top 100 real estate companies in China amounted to 3.4599 trillion yuan, a decrease of 34.7% compared to the same period last year.
Reportedly, as of the end of September 2024, the leverage ratio of listed real estate companies in Shanghai and Shenzhen has increased, and their short-term debt repayment ability has decreased. The average net debt ratio of listed real estate companies in Shanghai and Shenzhen was 87.1%, up 6.3 percentage points from the same period last year, with a cash short debt ratio of 1.1, down 0.3 from the previous year.
Looking at specific companies, as of the end of September 2024, Vanke’s total interest-bearing debt amounted to 327.61 billion yuan, with over 64.4% of it maturing in over a year; by the end of June, Poly Developments had a total interest-bearing debt of 373.5 billion yuan, with new debt of 93.8 billion yuan.
According to statistics, Chinese real estate companies have outstanding bond balances of 130.46 billion yuan due for repayment in the fourth quarter of this year, 727.27 billion yuan within a year (from October 2024 to September 2025), and 1.3892 trillion yuan within two years (from October 2024 to September 2026).