In August, the sales of the top 100 real estate enterprises in China decreased by about 26.8% compared to the same period last year, with a 10% decrease month-on-month. This indicates that the Chinese real estate market is still sluggish and continues to be in a downward trend.
On August 31st, a report released by the third-party research institution, CRIC Real Estate Research, showed that in August, the top 100 real estate enterprises in China achieved a total sales value of 251.2 billion yuan, a decrease of 10% compared to the previous month and a 26.8% decrease year-on-year. The decline in August was 7.1 percentage points higher than that of July, with the monthly performance continuing to remain at historically low levels.
According to data from the China Real Estate Information Corporation, in August, the sales of the top 100 real estate enterprises decreased by 22.1% year-on-year and 2.43% month-on-month.
Looking at the cumulative performance, CRIC stated that from January to July, the sales turnover of the top 100 real estate companies amounted to 2.3821 trillion yuan, a decrease of 36.5% compared to the same period last year.
Data from the China Real Estate Information Corporation showed that in the first eight months of this year, the total sales of the top 100 real estate companies amounted to 2.68324 trillion yuan, a decrease of 38.5% year-on-year (a decrease of 40.1% year-on-year in the first seven months).
Specifically, CRIC mentioned that in the first eight months of this year, there were a total of 6 real estate companies with sales exceeding 100 billion yuan, a decrease of 6 from the same period last year. Additionally, the number of real estate companies with sales exceeding 10 billion yuan decreased to 56 companies from 94 companies last year.
The data from the China Real Estate Information Corporation showed that in the first eight months of this year, the sales of real estate companies across all categories have declined. The average sales volume of the top 10 real estate companies was 130.22 billion yuan, a decrease of 30.8% year-on-year; the average sales volume of the top 11-30 real estate companies was 33.95 billion yuan, a decrease of 42.6%; the average sales volume of the top 31-50 real estate companies was 15.52 billion yuan, a decrease of 47.0%; and the average sales volume of the top 51-100 real estate companies was 7.83 billion yuan, a decrease of 45.2%.
The continuous decline in sales has severely impacted the financial performance of real estate companies whose main business is residential development.
According to the monitoring data from the China Real Estate Information Corporation, the average operating income of the 105 A+H-share real estate companies that have announced their mid-year performance for 2024 was 11.591 billion yuan, a decrease of 13% year-on-year, and the average net profit was 145 million yuan, a decrease of 82.05% year-on-year.
Out of these companies, 72 saw a decline in operating income, 87 experienced a drop in net profit, and 50 companies reported losses, with 24 of them recording losses for the first time since the outbreak of the pandemic.
The China Real Estate Information Corporation believes that against the backdrop of weak market demand, declining house prices, and intensified market competition, real estate companies are facing obstacles in sales, resorting to “volume for price” strategies to reduce inventory. This has led to insufficient momentum for revenue growth and pressure on profit levels. Moreover, continuous write-offs for investment properties and inventory by real estate companies have also eroded industry profit margins to a certain extent, a trend likely to continue in the near future. Market adjustments and the delivery conversion of low-margin projects will continue to put pressure on profitability.
The China Real Estate Information Corporation stated, “Overall, the real estate market in China is still in a phase of deep adjustment.”
However, with the traditional peak sales season in China (“Golden September and Silver October”) approaching, the China Real Estate Information Corporation believes that the activity in the new housing markets of core cities may slightly increase in the short term. Yet, the substantial reduction in land supply in the previous period may constrain the supply capacity of real estate companies, thereby hindering sales recovery.
According to the China Real Estate Information Corporation’s ranking of the top 100 land acquisition activities of national real estate companies from January to August 2024 published on August 30, the total land acquisition amount of the top 100 companies was 473.13 billion yuan, a 40% decrease compared to 788.8 billion yuan last year, further expanding by 2.0 percentage points compared to the period from January to July.