After the Chinese real estate market fell into a crisis, real estate professionals had to scramble to find new jobs, only to realize that job hunting was proving to be extremely difficult. The once prosperous white-collar lifestyle seemed to have vanished into thin air, leaving them unable to return to their past lives.
According to notes shared on the popular app Little Red Book by a 40-year-old real estate professional about her experiences of unemployment and job seeking, she had graduated from university and previously worked in the brand operations and project investment departments of a well-known real estate company.
Being unemployed for three months, she found herself scrolling through major job recruitment websites every day under the pressure of financial strain, hoping for positive responses. However, most of the job offers she received were related to telemarketing, second-hand housing agencies, insurance sales, and various other sales positions that required cold calling and messaging. Another option was to join a housekeeping service company, which offered training to work as a housekeeper or maternity nurse.
Impacted by the downturn in the real estate industry, the real estate development and intermediary services sectors were hit the hardest. According to official economic census data from the Chinese Communist Party, these two sectors accounted for 29% and 13% of total industry employment respectively, making it difficult for those laid off from real estate to transition to positions in new industries such as new energy vehicles.
Bloomberg recently reported the story of a 30-year-old woman who found herself unemployed from the real estate sales department. Ivy Zhang, a graduate in 2016, had joined one of China’s largest real estate companies. She worked tirelessly, often working until 11 p.m. after being promoted to a larger city following her “Sales Champion” title.
To reward herself, she would sometimes spend lavishly, frequently splurging on 4,000 yuan worth of spa packages to relax, even when she had little time to use them. She mentioned that she had so much money, she didn’t even need to think before spending it.
However, her days of excitement came to an abrupt halt in 2021. The pace of presale in the real estate market had exceeded the construction speed, leading to a complete collapse of the industry after facing severe government crackdowns on corporate funding chains.
Many homebuyers were left gazing at unfinished properties, triggering protests nationwide. Developers like Country Garden and Evergrande faced bond defaults one after another. Local governments saw a sharp decline in land sale revenues. Empty buildings and unfinished public projects became stark representations of the dwindling global confidence in Chinese investments and dissatisfaction with the economic governance of the Chinese authorities.
Those who had believed that the real estate sector was their gateway to a middle-class lifestyle found their lives completely upended.
Their once brilliant careers had turned into bubbles. Research data from the real estate think tank showed that over the three years leading up to 2023, economic recession had caused around 500,000 people to leave the real estate industry.
According to economic research by Bloomberg, the proportion of the real estate industry in China’s GDP is expected to decrease from 25% to around 16% by 2026. Analysts warned that this might put around 5 million people at risk of unemployment or income reduction.
Even young Chinese individuals were struggling to find jobs, with the revised official data showing a youth unemployment rate of 15.3%.
“If you still expect to live like you did before, then you are basically dreaming,” said Zhang in an interview with Bloomberg.
Having once helped Country Garden sell nearly 1 billion yuan worth of residential properties during her peak times, she now had to make a living by selling health products through social media.
So far, her business had not been great, only managing to sell three items a month, which was insufficient to cover her expenses. This was a far cry from the days when she used to earn 600,000 yuan a year.
She and her husband had postponed their plans for having children, she started seeking discounts when shopping online, cooked at home to avoid takeout, and cut down on social activities to reduce costs.
“If you still expect to live like you did before, then you are basically dreaming,” Zhang remarked. “If I used to spend 3,000 yuan, now I try to see if I can reduce it to 2,000 yuan. Then I see if I can cut it down to 1,000 yuan. As long as I can survive.”
Compiled data from Bloomberg and estimates from Fitch Ratings indicated that this year’s sales of apartments and commercial real estate were expected to decline by 45% compared to 2021. Even Vanke, once considered to survive with state support, was facing pressure with its credit rating downgraded to junk status.
On Friday, the Chinese Communist Party announced the so-called “heavyweight” measures in an attempt to reverse the real estate industry’s downward spiral, which included promoting housing transactions, acquiring existing unsold houses, reducing loan down payments, and removing the lower limits on loan interest rates for first and second homes. However, experts questioned the effectiveness of these rescue measures, pointing out the lack of key details and the grim outlook.
Many potential homebuyers were still waiting and watching for further price drops. Since 2024, the downward trend in Chinese property prices had shown no signs of stopping, with the latest data indicating a 10% decline this year.
Zhu Ning, a finance professor at the Shanghai Advanced Institute of Finance, told CNBC, “Unless potential homebuyers feel a significant change in rising house prices, the current prices are still too high compared to household incomes or rental yields.”
“Ultimately, it will require intervention from the central government to expand their credit into the real estate market, otherwise it’s a bit difficult for us to believe we have overcome the crisis or it might be too early to say so,” he added.