China Residential Real Estate Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Residential Real Estate Market in China is segmented by Type (Villas and Landed Houses, Apartments and Condominiums) and by city (Shenzhen, Beijing, Shanghai, Hangzhou, Guangzhou, and Other Cities). The report offers the market sizes and forecasts for the China residential real estate market in value (USD Billion) for all the above segments.

China Residential Real Estate Market Size

China Residential Real Estate Market Summary
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Study Period 2019 - 2028
Base Year For Estimation 2022
Forecast Data Period 2023 - 2028
Historical Data Period 2018 - 2021
CAGR > 5.00 %
Market Concentration Medium

Major Players

China Residential Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

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China Residential Real Estate Market Analysis

The Chinese residential real estate market is expected to register a CAGR greater than 5% during the forecast period (2023-2028).

  • China's new home prices decreased at their fastest pace in over seven years in October 2022, weighed down by COVID-19 curbs and industry-wide problems, reflecting a deepening contraction that prompted authorities to ramp up support for the sector. New home prices slumped 1.6% year-on-year after a 1.5% fall in September 2022. That was the biggest annual drop since August 2015 and the sixth month of contraction. Home prices in 100 cities fell for the sixth month in December 2022, declining 0.08% from a month earlier after falling 0.06% in November 2022.
  • Chinese authorities are making their biggest effort yet to end a crisis in the country's vast real estate sector that has weighed heavily on the economy in 2022. Key measures include allowing banks to extend maturing loans to developers, supporting property sales by reducing the size of down payments and cutting mortgage rates, boosting other funding channels such as bond issues, and ensuring the delivery of pre-sold homes to buyers. In August 2020, the government began trying to rein in excessive borrowing by developers to curb runaway house prices. The problems escalated in 2021 when Evergrande - the nation's second-largest developer - defaulted on its debt. As the property sector crashed, several major companies sought protection from their creditors. The cash crunch meant that work on many pre-sold housing projects across the country was delayed or suspended.
  • The crisis entered a new phase in the summer of 2022 when angry home buyers refused to pay mortgages on unfinished homes, roiling financial markets and sparking fears of contagion. Since then, authorities have tried to defuse the crisis by urging banks to increase loan support for developers so that they can complete projects. Regulators have also cut interest rates in a bid to restore buyer confidence. However, the property slump persisted as buyers backed away from the market because of the weak economy and strict Covid curbs.
  • In October 2022, sales by the 100 biggest real estate developers contracted 26.5% from a year ago. From January to November 2022, their sales have fallen by 43%. However, the property sector has also been boosted slightly after Beijing abruptly dropped its strict zero-Covid policy in early December, which could lure consumers back to the market.

China Residential Real Estate Market Trends

Urbanization Driving the Residential Real Estate Market

One of the factors driving demand for the residential real estate market is the rising pace of urbanization, noting that at the end of 2020, China's urbanization ratio was around 64%, and this ratio is to rise over the next five years to 70% or 75%. Between 2000 and 2020, an estimated 415 million new residents settled in China's cities, and an estimated 208 million will settle by 2040, according to estimates by the United Nations. China's urbanization rate of permanent residence hit 64.72% in 2021. In 2021, the country saw an accelerated trend of rural residents moving to cities, according to the National Development and Reform Commission. Due to this, the capacity of city clusters and circles has been enhanced, the quality of urban construction has been improved, and the integrated development of rural and urban areas has also made new strides.

With improving job market conditions and better income growth, consumers or households are looking for (an) upgrade or buying primary (residences) in urban areas. Beijing has carried out various measures to ease the pressure on young people to buy houses, such as offering government-subsidized homes. However, not all people can buy these houses, so they wait and save money to buy commercial houses. With growing urbanization, property prices in first-tier megacities and economically prosperous towns in many countries remain shockingly high, and newcomers cannot afford to buy a home. This leads to a popular belief that real estate is the best way to preserve and generate wealth, stimulating the demand for additional properties.

China Residential Real Estate Market: Degree of Urbanization, in Percentage (%), China, 2015-2022

Lowering of Mortage Rates for Mitigating Property Crisis

Lending mortgage rates also influence the decision of house purchase in the residential real estate market. In February 2022, banks in nearly 90 Chinese cities slashed mortgage rates to boost sales and mood in a residential real estate market roiled by a liquidity crisis and struggling developers. Commercial lenders decreased mortgage rates after the central bank cut the benchmark LPR twice in December 2021 and January 2022, aimed at boosting the world's second-largest economy's flagging growth. China's home prices fell faster in December 2022, reflecting persistently weak demand amid rising COVID-19 cases despite a slew of support measures. China's property market crisis worsened in the summer of 2022, with official data showing home prices, sales and investment all, adding pressure on the faltering economy. The lowering of mortgage rates is an effort to mitigate this crisis.

For the first time since mid-2020, mortgage rates in Beijing and Shanghai have fallen month over month. China's four biggest banks lowered mortgage rates in the southern city of Guangzhou by 20 basis points in February 2022. Thirty basis points cut mortgage rates in smaller cities such as Hohhot, Zhongshan, and Huizhou. Since late 2021, authorities have taken several measures to avert a hard landing for the property sector, including steps to support buyers such as newly married couples. The Shanghai branch of the central bank has told commercial lenders in the financial hub to accelerate real estate-related loans. In August 2022, China's Central Bank, the People's Bank of China (PBOC), made its biggest recorded cut in the five-year Loan Prime Rate (LPR) to rein in the said crisis. The five-year LPR, cut by 1.5% to around 4.2%, would bring down the cost of housing mortgage repayments across China. In 2022, China's central bank slashed a key mortgage rate for the first time in almost two years, causing the shares of Chinese property developers to soar in Hong Kong. The stock prices of Hong Kong-listed Chinese property developers increased dramatically, recovering some of the recent losses.

China Residential Real Estate Market: Value of Residential Real Estate Mortgages, in USD trillion, China, Q1 2019 - Q2 2022

China Residential Real Estate Industry Overview

The China residential real estate market is fragmented in nature, considering the presence of several local and global players in the market, with the major players holding little market share. The Chinese residential real estate market is competitive with the presence of property developers like Evergrande Real Estate Group Limited, China Vanke Co. Ltd, Poly Real Estate Group Co. Ltd, GreenLand Group, and China State Construction Engineering Corporation. The growing presence of international funds and foreign capital is increasingly attracting domestic developers to have joint ventures to gain a foothold in the country and enhance their financial strength and management expertise.

China Residential Real Estate Market Leaders

  1. Evergrande Real Estate Group Limited

  2. China Vanke Co., Ltd.

  3. Poly Real Estate Group Co., Ltd.

  4. GreenLand Group

  5. China State Construction Engineering Corporation

*Disclaimer: Major Players sorted in no particular order

China Residential Real Estate Market Concentration

China Residential Real Estate Market News

  • February 2022: Dar Al-Arkan, a Saudi real estate corporation, announced the creation of an office in Beijing, China. The move is in accordance with Dar Al-strategic Arkan's expansion ambitions and builds on the company's global brand development efforts. The company's Beijing office is expected to serve a variety of tasks, including establishing joint ventures between Dar Al-Arkan and renowned Chinese real estate developers for both the Chinese and Saudi markets, as well as enhancing investment and knowledge-sharing opportunities between the two countries. Dar Al-office Arkan's will serve as a hub for Chinese enterprises and investors looking to expand, start businesses, or invest in the Kingdom.
  • February 2022: China Evergrande Group announced that it sold stakes and "right to debt" in four developments to two state-owned trust firms for CNY 2.13 billion (USD 0.35 billion), in a move to ensure their construction goes ahead as well as delivery of its other projects. The world's most indebted property developer is struggling to complete projects and homes - deemed a priority by China's policymakers to ensure social stability - while weighed down by its more than USD 300 billion in liabilities. Evergrande sold its stake and right to debt in a residential development in Chongqing and Dongguan to Everbright Trust for CNY 1.03 billion (USD 0.19 billion), as well as those in a housing project in Foshan and a theme park development in Guangzhou to Minmetals Trust for CNY 1.1 billion (USD 0.16 billion).

China Residential Real Estate Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Market scenario

    2. 4.2 Residential Real Estate Buying Trends - Socioeconomic and Demographic Insights

    3. 4.3 Government Initiatives and Regulatory Aspects for Residential Real Estate Sector

    4. 4.4 Insights on Size of Real Estate Lending and Loan to Value Trends

    5. 4.5 Insights on Interest Rate Regime for General Economy, and Real Estate Lending

    6. 4.6 Insights on Rental Yields in Residential Real Estate Segment

    7. 4.7 Insights on Capital Market Penetration and REIT Presence in Residential Real Estate

    8. 4.8 Insights on Affordable Housing Support Provided by Government and Public-private Partnerships

    9. 4.9 Insights on Real Estate Tech Start-ups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)

    10. 4.10 Impact of COVID-19 on the market

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

    2. 5.2 Restraints

    3. 5.3 Opportunities

    4. 5.4 Industry attractiveness - Porter's Fives Forces Analysis

      1. 5.4.1 Bargaining Power of Suppliers

      2. 5.4.2 Bargaining Power of Consumers / Buyers

      3. 5.4.3 Threat of New Entrants

      4. 5.4.4 Threat of Substitute Products

      5. 5.4.5 Intensity of Competitive Rivalry

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 Apartments & Condominiums

      2. 6.1.2 Villas & Landed Houses

    2. 6.2 By Key Cities

      1. 6.2.1 Shenzhen

      2. 6.2.2 Beijing

      3. 6.2.3 Shanghai

      4. 6.2.4 Hangzhou

      5. 6.2.5 Guangzhou

      6. 6.2.6 Other Key Cities

  7. 7. COMPETETIVE LANDSCAPE

    1. 7.1 Market Concentration Overview

    2. 7.2 Company profiles

      1. 7.2.1 Evergrande Real Estate Group Limited

      2. 7.2.2 China Vanke Co. Ltd

      3. 7.2.3 Poly Real Estate Group Co.

      4. 7.2.4 Green Land Group

      5. 7.2.5 China State Construction Engineering Corporation

      6. 7.2.6 China Resources Land Ltd

      7. 7.2.7 Longfor Properties Co. Ltd

      8. 7.2.8 R&F Properties

      9. 7.2.9 China Merchants Property Development Co. Ltd

      10. 7.2.10 Hopson Development Holdings Ltd*

    3. *List Not Exhaustive
  8. 8. FUTURE OF THE MARKET

  9. 9. APPENDIX

China Residential Real Estate Industry Segmentation

Residential real estate is an area developed for people to live in and cannot be used for commercial or industrial purposes. It emerges when land sanctioned for residential use is purchased by someone, which becomes real property and encompasses a large variety of potential dwellings, from houses to houseboats and from neighborhood types ranging from the poorest slum to the wealthiest suburban subdivision. The report focuses on the market dynamics, technological trends, insights, and government initiatives in the residential real estate sector. Furthermore, it analyzes the key players present in the market and the competitive landscape in the Chinese residential real estate market. China's residential real estate market is segmented by type ( villas and landed houses, apartments, and condominiums) and by city (Shenzhen, Beijing, Shanghai, Hangzhou, Guangzhou, and other cities). The report offers the market sizes and forecasts for the China residential real estate market in value (USD Billion) for all the above segments.

By Type
Apartments & Condominiums
Villas & Landed Houses
By Key Cities
Shenzhen
Beijing
Shanghai
Hangzhou
Guangzhou
Other Key Cities

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China Residential Real Estate Market Research FAQs

The China Residential Real Estate Market is studied from 2019 - 2028.

The China Residential Real Estate Market is growing at a CAGR of >5% over the next 5 years.

Evergrande Real Estate Group Limited, China Vanke Co., Ltd., Poly Real Estate Group Co., Ltd., GreenLand Group, China State Construction Engineering Corporation are the major companies operating in China Residential Real Estate Market.

China Residential Real Estate Industry Report

Statistics for the 2023 China Residential Real Estate market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. China Residential Real Estate analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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