In recent news from mainland China, the ongoing substantial losses of real estate enterprises continue to persist. According to the quarterly reports released by 77 A-share listed real estate companies for the first three quarters of 2025, over 50% of these companies reported losses. Among them, 41 companies collectively suffered a net loss totaling a staggering 87.216 billion yuan.
Among these 41 companies, Greenland Holdings and Xinda Real Estate reported losses exceeding 5 billion yuan each. Jinke Group and China Overseas Property Group faced losses of around 4 billion yuan. Additionally, Rongsheng Development reported a net loss exceeding 3 billion yuan, Beichen Industry a net loss of over 2 billion yuan, Financial Street, *ST Nan Zhi, and others experienced net losses exceeding 1 billion yuan.
Statistics reveal that all 41 listed real estate companies ended up with negative net profits, amounting to a total loss of 87.216 billion yuan.
The overall situation of sustained net losses in China’s real estate industry has persisted for several years. Analysts attribute the primary reasons for the losses to downward pressure on the macroeconomy, deep adjustments in the real estate market, changes in population structure, and worsening financing conditions. These factors lead to a decline in industry sales, lowering property prices, project stagnation, and consequently causing numerous real estate companies to face losses and financial difficulties.
James H. Nolt, a senior researcher at the New York Institute of World Policy Studies, pointed out in an article titled “Long-Term Continuation of China’s Economic Recession” that the bursting of the Chinese real estate bubble is inevitable.
He stated that the situation in China has an additional layer of complexity. Most provincial and local governments profit and enhance their own reputation by subsidizing large-scale real estate development projects. According to Goldman Sachs economists, this figure amounts to a staggering $8.4 trillion, nearly 50% of GDP. The profit-making methods of local governments are no different from those of any real estate developer.
The Chinese Communist government cannot escape blame for triggering this real estate crisis. The “Three Red Lines Policy” introduced by Beijing in August 2020 restricted financing for real estate companies and compressed leverage, resulting in a weakened upward momentum in property prices.
Tightened credit and disrupted funding sources have made it challenging for large Chinese real estate companies relying on high leverage and profit from rising prices, as well as millions of individual investors, to “continue to leverage.” Once property prices start to stabilize and subsequently decline, speculative demand diminishes. While consumers may need to purchase properties for self-use, speculative investors are only willing to invest when they are certain that prices will continue to rise.
The article concludes by highlighting that the true cause of China’s economic downturn is the accumulation of fragile and unsustainable debt due to long-term high-speed growth. Without a solid economic foundation, as the saying goes, the higher you fly, the harder you fall.