China’s real estate market is in an unprecedented “crisis”. With economic downturn and shrinking assets, major real estate enterprises have been releasing bleak half-yearly forecasts, with record-high losses and market liquidity on the brink of exhaustion. Experts warn that this is not just a disaster for the industry, but could also evolve into a severe reality affecting the livelihoods of the entire population.
According to data from the real estate information and consulting agency CRIC, in the first seven months of this year, the top 100 real estate companies saw a cumulative sales drop of 12.5% year-on-year, with a further expansion of 24.3% in July alone, indicating that profit pressure in the second half of the year will be “overwhelmingly suffocating”.
The latest data released by the think tank Yi Han Intelligence shows that as of July 31, 65 A-share listed real estate companies announced their performance forecasts for the first half of this year. Among them, a staggering 41 companies are expected to incur losses, accounting for over 60%, highlighting the ongoing industry pressure.
Former industry leader Vanke expects losses to reach as high as 10 to 12 billion yuan, surpassing last year’s loss of 9.852 billion yuan and topping the loss list. Former star companies like Greenland Group and China Fortune Land Development are also not spared, with expected losses ranging from 5.5 to 7.5 billion yuan and 3.4 to 4.2 billion yuan respectively. Including *ST Jinke, Overseas Chinese Town, and Xinda Real Estate, there are 8 real estate companies expected to incur losses exceeding 2 billion yuan, showcasing the breadth and depth of the losses.
Out of the few 24 companies projected to make profits, only Poly Development and Binhai Holdings are forecasted to achieve a net profit of over 1 billion yuan. However, even Poly Development, a state-owned enterprise, saw a steep 63% year-on-year profit decline, indicating that even the “national team” struggles to stand alone.
Vanke’s plight is particularly pronounced. Despite significant management changes earlier this year, with Xin Jie from Shenzhen State Assets appointed as chairman, and receiving massive blood transfusions totaling over 21 billion yuan from state-owned enterprises like Shenzhen Metro Group, the losses continue to widen. In the first half of the year, Vanke’s contracted sales amounted to only 69.1 billion yuan, nearly halving from the 127.33 billion yuan during the same period last year, putting continuous pressure on cash flow. The slogan “stay alive” from eight years ago now seems more like an accurate prediction of its own fate.
Real estate blogger “Huihu speaks about real estate” bluntly stated that even with massive funding injections, Vanke’s losses continue to expand, clearly indicating that the situation for Chinese real estate companies in 2025 is worse than in 2024, facing a “worsened crisis” today.
“Huihu speaks about real estate” further revealed the true face of the real estate market: official Chinese Communist Party data may serve “political purposes” and not fully reflect the real market situation.
Data shows that in July, the sales price of newly built residential properties for the top 100 real estate enterprises was 16,800 yuan per square meter, representing a year-on-year increase of 2.6% and a month-on-month increase of 0.18%, appearing to be “thriving”. However, the sales price of second-hand residential properties was 13,500 yuan per square meter, a decrease of 0.77% from the previous month and a significant 7.3% drop year-on-year.
The growing disparity between new and old housing prices, with actual transaction prices of second-hand houses generally much lower than the official statistics from the National Bureau of Statistics, is concerning.
More critically, the decline in property prices has not led to an increase in transaction volume. The blogger pointed out that the second-hand housing market has entered a state of “stagnation”, losing liquidity, which is more alarming than just price decline.
In terms of sales, the top 100 real estate companies only achieved a total sales volume of 1.86 trillion yuan from January to July, representing a 12.5% year-on-year decrease. Even in the worst scenario in 2024 when China’s real estate experienced its largest decline, the sales volume reached 9 trillion yuan that year, while the dismal data for the first seven months of 2025 indicates that the full year will face even more severe challenges.
Looking at the source, real estate investment has also seen a cliff-like decline. The Chinese National Bureau of Statistics data shows that real estate investment in the first half of the year was only 4.66 trillion yuan, marking an 11.2% year-on-year decrease. Of this, residential investment, the largest proportion, was 3.57 trillion yuan, down by 10.4% year-on-year. Compared to the total investment of 11 trillion yuan in 2023, the magnitude of the decline is significant.
In summary, “Huihu speaks about real estate” stated that the three core data sets: profits of top listed real estate companies, new and second-hand housing prices, sales volume, and real estate investment have all experienced a “major landslide”.
He asserted that peeling back the official “mild” data would reveal that the real estate industry is actually in a “disastrous” situation.
“Where is the bottom line for property prices now?” This question is troubling many Chinese citizens. Last year, prominent economist at Tsinghua University Li Daokui publicly stated that property prices may face adjustments in the near future, even hitting historic lows. He analyzed that this is related to changes in supply and demand, policy controls, and the macroeconomic situation, and recently his remarks have once again circulated on social media.
Economist Xiang Songzuo, who has long been focused on China’s macroeconomy, shares a similar viewpoint. A recording of his recent media interview has also been circulating on social media. When asked, “Where is the bottom line for property prices now?” he bluntly stated, “No one knows where the bottom line is. Economists cannot judge.”
He explained that the skyrocketing property prices were mainly supported by rigid demand and investment (speculative) demand. However, speculators have suffered painful lessons, with many property values falling back to or even below their original prices, leading to negative assets. In this context, investment demand has sharply contracted, and relying solely on rigid demand is not enough to support continued price increases.
Xiang Songzuo emphasized that a property price decline is inevitable, and everyone will have to bear the consequences. He pointed out that over 60% of Chinese people’s wealth is tied to housing, and a sharp drop in property prices directly leads to wealth shrinkage, which is a significant reason why people are unwilling to spend.
“The dramatic drop in property prices makes people uncomfortable and broke, with stocks not making money, properties falling, and salaries not increasing. How can ordinary people afford to consume?”
Zhang Xiaojing, Director of the Institute of Finance at the Chinese Academy of Social Sciences, recently stated in an interview with mainland media that a sharp drop in property prices disproportionately harms ordinary citizens, particularly lower and middle-income families. For them, property forms the main component of their wealth – with property values accounting for 60% to 70% of their total assets. Once property prices fall, it directly leads to wealth shrinkage and losses.
Faced with this “crisis”, a significant change was put forward at the recent urban work conference convened by the central government of the Chinese Communist Party: the era of incremental expansion has become history, and China’s real estate market will shift focus towards improving existing stock and urban renewal.
This signifies that in the future, only a small number of state-owned enterprises with strong financial capabilities, brand reputation, and close government relations will be able to participate in the market, while many real estate enterprises will “exit the historical stage”, with the industry facing a reshuffle and change of trajectory.
“Huihu speaks about real estate” pessimistically predicts, “In 2025, it will essentially be a year of widespread death for real estate companies, a year when the value of houses will plummet to zero, leading many households into a negative asset state. Therefore, this is a more brutal reality.
“In another two to three years, perhaps people will no longer focus on real estate, but rather on their living conditions, job status, and whether they can afford living expenses and children’s education fees, which will be even more cruel than the fall of real estate.”