With the continuous decline in China’s real estate industry, the real estate agency sector, seen as a barometer of the market, is going through an unprecedented “tremor”. From the desperate cries of real estate agents on social media to the large-scale layoffs by industry leaders, all signs indicate that the Chinese real estate industry is on the brink of collapse.
The wave of real estate agency closures has been intensifying in recent years. Many real estate agents on mainland social platforms have expressed their helplessness after being laid off. Blogger “mf阿童木” is a real estate agent. He recently stated that after working for over a year, the company still closed down. It is believed that more real estate agent stores will continue to close down in September.
Financial blogger “徽湖” recently sparked widespread attention by quoting a letter from a Shanghai second-hand housing agency manager, revealing a large-scale closure trend among traditional real estate agencies in Shanghai. Reports indicate that Shanghai’s leading real estate agency, Lianjia, alone has laid off nearly 8,000 people. In one neighborhood in Shanghai, three agencies closed down within a week.
Although the number of nearly 8,000 cannot be independently verified, it aligns closely with market perceptions and is corroborated by public data and historical reports.
Lianjia is the largest real estate agency platform in China.
In July of this year, the real estate agency “Mai Sheng Ju Hao Fang” stated that when the market downturn hits, the frontline brokers are the first to be abandoned by Lianjia. In June, Shanghai Lianjia accelerated its layoffs and closures. The gold-level broker Li Xiaoge’s Lianjia store in Xuhui District’s Shenghua Jingyuan had few transactions in June, and still no sales in July. In the industry’s cold winter, Lianjia laid off employees and closed stores on a large scale, and reduced salaries. The brokers who once expanded the territory for Lianjia became the first sacrificial victims to be abandoned. Hundreds of employees of Shell Shanghai’s R&D team suddenly received layoff notices, requiring immediate resignation procedures. Shell officially called it “business adjustment”.
In recent years, with the continuous downturn in the real estate market, media reports have repeatedly mentioned the emergence of a “closure wave” among Shanghai real estate agencies. This phenomenon is not limited to small agencies but also includes large chain brands. During the market slump, the reduction in the number of brokers and the contraction of stores are common industry practices aimed at reducing operating costs to cope with the sharp decline in transaction volume.
As an industry leader, Shell looking for housing (Lianjia’s parent company) is a barometer of the market’s direction. Public reports show that since 2021, Shell has announced several rounds of layoffs, reducing the number of brokers by nearly 100,000 in just six months. These adjustments were primarily strategies adopted during the market downturn for “cost reduction and efficiency enhancement”. Although these data are nationwide, Shanghai, as a core market, likely bore a significant portion of the layoffs.
In May 2022, Shell was again reported to have “initiated a new round of layoffs”, involving departments such as production research, operations, and back-office, offering most employees compensation equivalent to N+1.
In first-tier cities, Shell’s layoffs began in Shanghai in recent years.
In October 2021, it was reported that Shell Shanghai laid off over 200 employees, including more than 100 in the R&D team and Shell Finance. The compensation plan was “N+3”.
At that time, Shell responded that there had been significant changes in the industry environment in 2021, leading the company to adjust its financial and other businesses in Shanghai.
According to public information, Shell’s nationwide layoffs mainly targeted first-line real estate brokers, non-core, and research departments, optimizing over 30,000 employees.
Five months later, in March 2022, following the release of the 2021 financial report, Shell was reported to have layoffs once again. This time, they were focusing on optimizing 10% of employees in the second-hand and new house trading service group, affecting several middle and senior management personnel, including the group’s vice president.
In response, Shell mentioned that the company was concentrating on the rental, home improvement, and home furnishings business and offering internal transfer opportunities to employees.
“徽湖” pointed out that in the four major first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen, a few long-established real estate agencies have nearly monopolized over 80% of the market share. The survival of real estate agencies directly depends on market transaction volume. Currently, the transaction volume of second-hand homes in Shanghai is at a low level, with extremely low transaction volumes in some regions, continuous price declines, and even reaching a state of “knee-cutting”. This situation of “falling volume and price” has made it difficult for agencies to maintain normal operations, leading to closures and layoffs as inevitable choices.
He pointed out that the large-scale closures and layoffs by leading companies like Lianjia and Shell indicate something significant. These big companies have specialized market analysts in big data who have detected something unsettling from the data, prompting such decisions. “They have heard the iceberg hit by the Titanic loosening.”
He mentioned that frontline sales staff understand the market the best, so there is a saying among the people: if you want to understand the real market, go to the agency stores to see whether the market is heating up or cooling down. With agencies now forced to lay off employees and close stores on a large scale, what will happen to the future real estate market?
In August, many regions in mainland China issued new real estate policies. Among them, Beijing and Shanghai loosened property purchase restrictions, allowing eligible buyers outside the fifth ring road in Beijing and outside the outer ring road in Shanghai to purchase an unlimited number of properties. Single adults are subject to family-based purchase restrictions, while Shanghai will no longer differentiate between first and second home mortgage pricing mechanisms.
However, according to public data, the volume of new home sales in Shanghai in August decreased by 27% compared to the previous month and 45% year-on-year. Shanghai, once the national real estate leader, has now become a laggard.
In mid-August, the historical transaction prices were hidden on the official website or app of Shanghai Lianjia, and meanwhile, historical transaction listings on the Shell housing platform also displayed as “no historical transaction prices”.
Prior to this, first-tier and hotspot cities such as Beijing, Guangzhou, Hangzhou, and Nanjing had already hidden second-hand home transaction prices.
The general belief is that the transaction price data looked too grim. Therefore, officials required Lianjia to hide price information, essentially turning a deaf ear to the problem.
As of June 2025, second-hand residential prices in China’s top 100 cities had declined for 28 consecutive months on a month-on-month basis and 30 consecutive months year-on-year.
“徽湖” raised the most critical concern: with the real estate market collapsing, there will be a stampede-like rush of resales of second-hand homes in the market. What’s even more worrisome is that even if properties are sold, without liquidity, that’s when things become truly terrifying. Regardless of real estate’s investment properties, value preservation properties, or financial attributes, if there is no liquidity, everything will be reset.
He believes that homeowners should be mentally prepared. If housing prices plummet and properties can still be sold, that would be a relatively good situation. However, if there is a complete lack of liquidity, considering that 70% of Chinese wealth is tied up in real estate, there will certainly be a collapse situation. Overnight, the entire population could regress to poverty.