In recent times, the Chinese central bank and various ministries, as well as local governments, have been continuously rolling out policies aimed at boosting the property market. However, these efforts have not managed to reverse the ongoing downward trend in the Chinese real estate market. In May, the top 100 real estate enterprises in China saw their sales volume decrease by over 30% year-on-year, with sales for the first five months of the year dropping by more than 40%.
According to reports from financial media, on May 31st, the top 100 real estate enterprises in China achieved a sales turnover of 322.41 billion yuan in May, representing a 33.6% decrease compared to the same period last year. The monthly performance continues to remain at historically low levels.
Looking at the cumulative performance, from January to May, the sales turnover of the top 100 real estate enterprises amounted to 1,413.37 billion yuan, down by 44.3% year-on-year.
Recently, the Chinese central bank, along with various ministries and local governments, have introduced a series of policies aimed at revitalizing the property market. Since May, demand-side policies have been unexpectedly strengthened, with the central bank issuing three new credit policies, bringing the national housing credit policy to its most relaxed era in history.
Following this, many second-tier cities have followed suit, with first-tier cities like Shanghai, Shenzhen, and Guangzhou releasing the most lenient credit policies since the removal of purchase restrictions in 2010, further complemented by relaxed purchase restrictions. During the same period, measures such as “trade-in for new” have also been implemented in various regions.
However, insiders from real estate companies have admitted that post-implementation of the new policies, the increase in sales was not as significant as expected. Most of the sales were conversions of customers who had been contemplating purchases prior to the recent policy announcements.
The head of a private real estate company in Changsha also mentioned that despite the local implementation of policies such as lowered mortgage rates and down payment ratios, the company did not take additional measures in response. They stated that the policy measures were insufficient, and customers were more inclined towards a wait-and-see approach, leading to no significant changes besides the ongoing price reductions and discounts.
In addition to the decline in sales performance, Chinese real estate companies are also facing considerable debt repayment pressures. According to data from the China Index Research Institute, in 2024, the total amount of maturing bonds for real estate companies is 770.31 billion yuan, showing a 19.6% decrease from the previous year but still remaining at a relatively high level.
Of this, 69.0% consists of credit bonds, while 31.0% comprises offshore bonds, indicating a greater pressure on domestic debt repayment.
The 21st Century Economic Report believes that due to the continuous decline in sales, the debt pressure for most real estate companies this year should not be underestimated. A relevant executive from a leading real estate company mentioned that they have already ceased land acquisitions this year and are focusing on channeling sales proceeds back to the headquarters to repay debts.