As China’s real estate market, which accounts for one-third of the country’s total wealth, collapses, the industry’s workforce is the first to bear the brunt, with many losing their jobs. Even the survivors are facing significant challenges, with some experiencing a 90% salary cut, forcing them to downgrade their lifestyle to weather the economic downturn, with little hope in sight.
According to data from China’s real estate research institution, Ke Yan Think Tank, the sluggishness in the real estate industry over the past three years until 2023 has led to approximately 500,000 people losing their jobs, not counting employees in related sectors such as construction and marketing.
It is estimated that nearly thirty real estate companies in China have faced bankruptcy and liquidation at the hands of creditors. In May, two more Chinese real estate enterprises, the Evergrande Group and the parent company of Country Garden, DiMa Group, defaulted on debts, further worsening the situation.
According to Alex Capri, a senior lecturer and researcher at the National University of Singapore, the real estate collapse in China is triggering a broader, painful reflection. Real estate professionals in China are facing a mid-career crisis, being forced to undergo “extensive” skills adjustments.
Interviewed by Fortune, Ivy Zhang, a senior real estate professional in China, once hailed as a “sales champion” for her outstanding performance, shared how she used to splurge on a $550 spa package regularly, feeling like the money in her bank account was just a string of numbers.
However, her fortunes took a turn for the worse when the real estate giant Evergrande was ordered to clear its debts in 2021, plunging the Chinese real estate market into turmoil.
At 30 years old, Zhang helped sell nearly $1 billion worth of apartments for Country Garden, earning a whopping annual salary equivalent to $83,000. Now, to pay her bills, she is compelled to sell health products on social media. So far, she is struggling to make ends meet.
Zhang even had to postpone her plans to start a family with her husband. “If you still want to live the life you used to have, you are basically dreaming,” she said. “Previously, I spent $3,000, now I want to see if I can reduce it to $2,000, and then see if I can reduce it to a thousand. Just need to survive.”
Charlie Zeng, interviewed by Fortune, had worked at Vanke Real Estate and earned over $250,000 in good times. After the real estate market collapsed, it took him a year to find a job, and at his most desperate moment, he voluntarily accepted a 90% pay cut. After 70 interviews, he eventually secured a job, expressing, “This industry has no future, it has been abandoned.”
The days when real estate companies used to lavish employees with Mercedes-Benz cars as year-end bonuses are now a distant memory. However, many analysts believe that the market has not yet hit rock bottom.
According to Bloomberg Economics, by 2026, the real estate industry’s contribution to China’s GDP may shrink to around 16%. Analysts warn that this expectation could put around 5 million people at risk of unemployment or reduced income.
Even young people in their prime working age are struggling to find jobs. The latest data from the Chinese government shows that the unemployment rate among urban youth aged 16 to 24, excluding students, remained at 15.3% in March, while the rate for those aged 25 to 29 rose to 7.2%. Given the Chinese government’s tendency to conceal unfavorable conditions in its data, the actual situation could be even worse.
“People are very discouraged and fearful,” Anne Stevenson-Yang, co-founder of J Capital Research, expressed to Fortune, emphasizing the severity of the situation.