China's Top 100 Real Estate Companies See 33% Drop in Sales... "Transaction Cliff Situation"

China's real estate sales have sharply declined, failing to escape a slump. The sales environment worsened compared to previous years due to high temperatures and unpredictable weather, and buyers are still watching the market, believing it has not yet hit bottom.

On the 1st, Chinese economic media outlet Caijing cited market information firm China Real Estate Information Corporation (CRIC), reporting that the new home sales of China's top 100 real estate developers in July amounted to 305.43 billion yuan (approximately 54.5956 trillion KRW), a 33.1% decrease compared to the same period last year. Compared to the previous month, the decline was 33.5%.

[Image source=Reuters Yonhap News]

The cumulative performance, which had been fluctuating between recovery and stagnation this year, also turned negative. From January to July, the sales of the top 100 real estate developers decreased by 4.7% year-on-year. A CEO of a company ranked in the top 20 described the July results to Caijing as a "cliff-like decline," and a representative from a state-owned real estate company said, "The overall recovery is much slower than expected at the beginning of the year, and July was extremely sluggish."

Caijing observed, "Market demand in regions such as Changsha, Wuhan, and Zhengzhou decreased by about 20% compared to the previous month, and subscription rates fell to half the usual level," adding, "Now even core cities are showing signs of contraction." It further explained, "In cities like Hefei and Nanchang, ongoing housing construction projects are expected by insiders to have to lower prices from the originally planned levels to sell." Land industry officials in first-tier cities told the media, "The recent market atmosphere is the worst since the outbreak of COVID-19."

At the end of last month, regulatory authorities announced support measures for the real estate market. The Central Political Bureau emphasized, "There have been significant changes in the supply and demand of the real estate market," and stressed the need to "adapt to the new situation by timely adjusting and optimizing real estate policies." They mentioned measures such as lowering loan interest rates and support for subscription and loan disqualification targets.

The problem is that these declarative government support measures are insufficient to thaw the frozen market. Caijing quoted a real estate official from eastern China, saying, "The government voiced intentions to ease real estate regulations, including in first-tier cities, but actual performance has not improved," adding, "Although it has not been long since the policies were announced, developers have been continuously lowering prices and adjusting discount rates for some time." The official also noted, "Real estate consumers believe the market has not yet hit bottom and remain in a wait-and-see mode."

Liu Shui, head of the market research department at Zhongzhi Research Institute, explained, "After regulators have intensively expressed their views, the pace of policy implementation will accelerate in various regions," adding, "Policies will be optimized in core first- and second-tier cities, and the market can bottom out and gradually stabilize."

This content was produced with the assistance of AI translation services.