At what stage is the real estate market adjustment? Has its impact on the economy diminished? (AI Translation)
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专栏作家 罗志恒
Columnist Luo Zhiheng
中国房地产市场从2021年调整至今已经历四年，销售、投资、价格持续下行，目前调整到了什么阶段？对中国经济的影响还有多大？这事关经济分析的精准性和宏观调控的着力点。总体上看，房地产市场大幅调整后，房地产业占GDP的比重下降，销售等部分指标同比降幅收窄，看似影响逐步下降，但仍要充分认识到在当前房价再度下行的背景下，前期降幅收窄的指标有可能再度下滑，房地产对经济的角色逐步从正贡献转向负向冲击，需要其他力量对冲。
China’s real estate market has been in a state of adjustment since 2021, now entering its fourth year of decline as sales, investment, and prices continue on a downward trajectory. At what stage is this correction, and how significant is its impact on the Chinese economy? These questions are central to accurate economic analysis and effective macroeconomic policy. Broadly speaking, after a substantial correction, the property sector’s share of GDP has declined, and key indicators such as sales have seen their year-on-year contractions narrow, creating the appearance that the sector’s impact is receding. However, it is critical to recognize that, amid the current renewed downturn in housing prices, the indicators that previously showed narrowing declines may again begin to slide. The real estate sector’s role in the economy is shifting from a positive driver to a negative drag, requiring other forces to counterbalance its effects.
房地产调整到了什么阶段
What Stage Has the Real Estate Adjustment Reached?
2021年下半年以来，中国房地产市场经历了深度调整。按可比口径计算，2024年商品房销售面积、销售额、房地产投资、房企到位资金分别降至2021年高点的60.4%、56.9%、72.9%和53.5%，即2024年较2021年分别下降了39.6%、43.1%、27.1%和46.5%，但待售面积增加了47.6%。随着2024年926政治局会议后一系列稳地产政策落地显效，房地产市场出现止跌回稳态势，但基础仍不稳固。2025年上半年房地产销售降幅较去年收窄，但房地产投资降幅仍在扩大。2025年上半年，商品房销售面积、销售额、房地产投资、房企到位资金分别降至2021年同期的57.6%、50.9%、69.6%和48.8%，较2021年同期下降了42.4%、49.1%、30.4%和51.2%，但待售面积上升了50.6%。
Since the second half of 2021, China’s real estate market has undergone a profound adjustment. On a comparable basis, by 2024, the area and value of commercial housing sold, real estate investment, and funds raised by property developers had fallen to 60.4%, 56.9%, 72.9%, and 53.5% of their 2021 peak levels, respectively. That translates to declines of 39.6%, 43.1%, 27.1%, and 46.5% compared with 2021. Meanwhile, the area of unsold housing was up 47.6%. Following a series of real estate stabilization policies introduced after the Politburo meeting on September 26, 2024, the property market has shown signs of stabilizing, although the foundations remain shaky. In the first half of 2025, the decline in property sales narrowed compared with last year, but the contraction in real estate investment continued to widen. During this period, the area and value of commercial housing sold, real estate investment, and funds raised by developers fell to 57.6%, 50.9%, 69.6%, and 48.8% of their levels in the same period of 2021, respectively, marking declines of 42.4%, 49.1%, 30.4%, and 51.2%. Meanwhile, the area of unsold housing rose by 50.6%.
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- China’s real estate market remains in a prolonged downturn; by mid-2025, sales and investment metrics are 30-50% below 2021 levels, with inventory at record highs.
- Real estate’s contribution to GDP switched from positive to negative; in 2024, its share of GDP declined to 6.3% from 8.3% in 2020.
- Ongoing property adjustment is a major economic drag, impacting consumption, investment, local fiscal health, and employment, despite policy efforts to steady the sector.
[para. 1]
- 2021：
- Real estate sector’s added value peaked at RMB 9 trillion; land transfer revenues peaked at RMB 8.71 trillion; land finance dependency ratio reached 35.9%.
- Since 2021：
- China's real estate market entered a period of adjustment, beginning a decline in sales, investment, and prices.
- Second half of 2021：
- Profound adjustment in China's real estate market began, with sharp declines from 2021 peak levels.
- 2021-2024：
- Share of the real estate sector in GDP fell from 8.3% (2020) to 6.3% (2024); sector contributed -0.23, -0.05, and -0.12 percentage points to GDP growth in 2022, 2023, 2024 respectively.
- 2021-2024：
- Number of migrant workers in construction declined by nearly 13 million.
- 2022-2024：
- Real estate sector’s value added declined for three consecutive years; the sector's contribution to GDP growth turned negative.
- By 2024：
- Key real estate metrics including sales, investment, and developer fundraising had fallen drastically compared to 2021 peaks.
- 2024：
- Land transfer revenues dropped to RMB 4.87 trillion; national land finance dependency ratio slid to 17.3%. Construction industry's contribution to GDP growth fell from 0.26 (2024) to 0.04 (first half 2025) percentage points.
- September 26, 2024：
- Politburo meeting led to a series of real estate stabilization policies.
- After September 26, 2024：
- Property market showed signs of stabilizing, but remained on shaky ground.
- Fourth quarter of 2024 - First quarter of 2025：
- New home prices in first- and second-tier cities, and second-hand prices in first-tier cities, temporarily stabilized on a quarter-over-quarter basis.
- Second quarter of 2025：
- New home prices resumed their decline.
- First half of 2025：
- The nationwide commercial housing sales area and value, real estate investment, and developers’ fundraising all substantially below 2021 levels; narrowing decline in sales but further contraction in investment.
- First half of 2025：
- Real estate sector’s contribution to GDP growth rebounded slightly to 0.07 percentage points; value added in the sector rose just 1.0% year-over-year.
- First half of 2025：
- Investment in construction engineering within real estate fell by 13.4% year-on-year.
- First half of 2025：
- Revenue from state-owned land-use rights transfer totaled RMB 1.43 trillion, 41.4% of 2021’s level for the same period.
- End of June 2025：
- Newly built home prices in 70 large- and medium-sized cities were down 3.7% year-on-year; existing home prices down 6.1% year-on-year. New home prices registered negative month-on-month growth for 25 consecutive months.
- End of June 2025：
- Commercial housing inventory reached 769 million square meters, a record high for the same period. The narrow-definition destocking cycle at 26.7 months, commodity residential property at 19.0 months.
- By the end of June 2025：
- Xining was the only major city to record a month-on-month increase in second-hand home prices.
- Since May 2025：
- Property sales registered year-on-year declines; both new and second-hand home prices in cities like Guangzhou and Shenzhen declined month-on-month again.
- July 2025：
- Central Urban Work Conference emphasized urbanization strategies and urban village/dilapidated housing renovation.
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