Half of the people have suffered losses. Three new common senses in the real estate sector under major upheavals.

In 2021, the real estate market reached its peak. The sales volume of commercial housing nationwide was nearly 18.2 trillion yuan, accounting for 15.91% of the GDP.

In 2024, the sales volume of commercial housing nationwide dropped to 9.68 trillion yuan, only accounting for 7.17% of the GDP.

Some institutions and industry insiders predict that the real - estate sales will decline further this year, reaching the "800 - billion - yuan level". Correspondingly, there has been a series of phenomena, such as the contraction of the industrial chain, the reduction of practitioners' income, the depreciation of homeowners' assets, and the decline in the liquidity of second - hand housing.

Every change in the macro - level figures is actually a story of countless individuals. During the economic transformation period, super - individuals can still thrive based on minor trends, but most ordinary people can only survive under the mainstream narrative and bear the external pressure.

According to media reports, some homeowners have switched to become real - estate agents in order to sell their houses.

For example, Ms. Zhu in Shenzhen has an old house in the Liantang area of Luohu. In September 2024, due to work reasons, she planned to sell this house and buy a new one. However, it remained unsold for more than half a year after being listed.

In March this year, an anxious Ms. Zhu decided to join the ranks of real - estate agents to learn selling skills. However, she finally concluded that the gap between the price buyers were willing to pay and the homeowners' psychological bottom - line price was too large. To sell the house quickly, the price had to be reduced.

Buyers hope that the housing price will be lower, while sellers are already in great pain due to losses. However, "selling at a reduced price" is the mainstream narrative in the current second - hand housing market.

Although 29,231 second - hand residential properties were sold in Shenzhen in the first half of this year, a year - on - year increase of 36.6%, the individual experience is completely different.

A latest housing report on China released by UBS pointed out that currently, 47% of homebuyers are experiencing book losses.

UBS said that in the second - hand housing markets of various cities, the prices of second - hand housing in first - tier cities have dropped back to the level of 2021, those in second - tier cities to the level of 2018, and those in third - and fourth - tier cities to the level of 2016 or 2017.

Most homeowners believe that UBS' data does not reflect their real pain. If the actual transaction price is used as the standard, the years calculated by UBS should be at least "minus 5" years.

However, the real - estate market has not yet reached the bottom. The economy is under pressure, consumer power is insufficient, income is declining, and enterprises and individuals are still de - leveraging. Most people see no reason for housing prices to stabilize, so homebuyers think they can continue to "wait".

The perception of the market between buyers and sellers will continue to be fragmented, which is just one of the real situations in the current real - estate market.

There are many other fragmented phenomena at this stage. For example, the land auction market is booming, but housing prices continue to decline; new houses in Shanghai and Beijing are selling well, and there are even projects sold out on the day of release, but the transaction cycle of second - hand housing is getting longer; the rental return of a few old and shabby houses reaches over 3%, but the rental return rate of most luxury houses is only about 1%. Renting a luxury house is, in a sense, taking advantage of the rich; land is no longer the biggest asset of real - estate enterprises but a liability. The higher the historical land reserve of a real - estate enterprise, the worse its financial report will be; housing prices in first - tier cities are the most stable, but their consumption growth rate lags behind that of second - tier cities, showing a divergence between housing prices and consumption...

Behind these divergent phenomena are real contradictions. The real - estate market has never been as confusing as it is today.

Against this background, it is more important than ever to recognize the reality and clarify new common - sense about the real - estate market.

Common Sense 1

The market has not truly entered a new stage

Recently, when consulting a professional real - estate analyst, he said that if measured solely by housing prices, the housing prices in some cities may rebound in the future. However, if the scope of the rebound expands, long - term tools such as property tax and inheritance tax are likely to be implemented.

He said, "Don't think that we won't use these tax tools on a large scale. Remember that there are already several cities paying property tax."

To measure the new reality of the real - estate market, one should first look at the role of real estate in the economy, and second, look at the market demand for real estate as a commodity.

Regarding the first point, some people have analyzed in depth that the incremental market dominated by new houses has a relatively strong driving effect on the economy and investment because new - house construction is incremental investment. However, second - hand housing transactions do not generate new investment. It is more like a transfer of financial assets, with only the flow of personal funds and almost no incremental production, so its driving effect on the economy is very weak.

According to the data from the Shell Research Institute and the National Bureau of Statistics, from 2022 to 2023, the transaction area of second - hand residential properties in China continued to increase, while the transaction area of newly - built commercial housing continued to shrink. As a result, the proportion of the transaction area/transaction amount of second - hand residential properties increased to 38%/41% in 2023, an increase of 17/9 percentage points compared with 2021. This trend continued in 2024. According to Wind data, in the first half of 2024, the proportion of the transaction area of second - hand residential properties in 23 major cities reached 58%, a further increase of 9 percentage points compared with the whole year of 2023.

The key cities nationwide have entered the stock market, and real - estate investment has entered a stage of diminishing marginal returns. In third - and fourth - tier cities, there is a huge inventory of new houses, and new investment doesn't make much sense.

The economy itself has entered a stage of "de - real - estate - dependence".

Second, China has shifted from an absolute shortage of housing to a structural shortage. In 2018, the average number of self - owned houses per household had reached 1.1. After the accelerated construction in 2019, 2020, and 2021, the current figure must be even higher.

In other words, in addition to the decline in housing prices, the most fundamental factor for the shift from a seller's market to a buyer's market is the reversal of market supply and demand. This determines the future market fundamentals.

To put it simply, from the GDP to the real - estate market itself, there is no longer any motivation for all parties involved to boost the real - estate market.

Furthermore, the decline in the real - estate industry in recent years is not a "long - term trend" but a transition period between the old and new cycles.

Because real estate no longer serves as the main engine of economic development, but it cannot become a "burden" either.

You can regard the current situation as the chaos at the end of the golden age of real estate. After finding the bottom and achieving a new balance, a new stage will begin, and the transition period characterized by decline will end.

In the next 30 years, it will definitely not replicate the past 30 years or the reverse of the past 5 years. We should look at the future with a forward - looking perspective.

This is the first new common - sense about real estate.

Common Sense 2

The land auction is booming, housing prices are falling, and new houses are squeezing out second - hand houses

Whether it is the change of historical eras or the cycle change of an industry, the most prominent feature of the "chaos" period is "differentiation" and "separation".

For example, there is a separation between the land auction data and the real market experience.

This year, the land auction markets in several cities have frequently reported good news. For example, in Beijing, Shanghai, Hangzhou, and Chengdu, many land parcels were sold at high premium rates, and the overall market situation is significantly better than that in 2024.

Taking Beijing as an example, according to the statistics of Leju, as of June 30, a total of 22 residential land parcels were sold in the first half of 2025 in Beijing, with a total land area of about 1.209 million square meters, a total construction area of about 2.344 million square meters, and a total transaction amount of 100.55562 billion yuan, a year - on - year increase of about 37.3%. The average floor price has also increased from about 30,900 yuan per square meter in the first half of 2024 to about 42,900 yuan per square meter, an increase of 12,000 yuan per square meter.

The same is true for the national land market. According to the statistics of the China Index Academy, in the first half of 2025, the transfer fees of residential land in 300 cities nationwide increased by more than 20% year - on - year, and the average premium rate exceeded 10%, showing a significant increase compared with the same period last year.

The land markets in top - tier and mid - tier cities have risen more significantly. From the perspective of the 65 cities monitored by the 58 Anjuke Research Institute, the transaction scale of residential - related land increased by 18.4% year - on - year, the transfer fees increased by 45%, and the floor price increased by 22.3%, showing a "simultaneous increase in volume and price". The premium rate in Hangzhou was as high as 35.5%, and there were nearly 20 sectors where the floor - price records were broken.

However, there is also a divergence between the trends of land prices and housing prices.

Ten years ago, the transaction of a high - priced land parcel would surely drive up the prices of surrounding second - hand houses. Now, in the sectors where more new land parcels enter the market, the prices of second - hand houses are less able to hold up.

This is the overall trend of the listed prices of second - hand houses in Beijing monitored by 58 Anjuke in the past year. Land prices are rising, but the decline of second - hand housing prices is accelerating.

Data source: 58 Anjuke

Specifically in a certain area. Since the second half of last year, the supply of new land parcels in Haidian District has increased. It can be seen that every time there is a concentrated transaction of new land parcels, the decline curve of second - hand housing prices becomes steeper.

Data source: 58 Anjuke

The supply of new houses in Shibalidian has significantly increased in the past year. As a result, the decline rate of second - hand houses is 7.2 percentage points higher than the average level in the whole Chaoyang District, and the decline is accelerating almost twice as fast.

Data source: 58 Anjuke

The same situation has also occurred in the very popular Chaoqing area. Not to mention the suburban areas outside the core areas such as Chaoyang and Haidian, where the supply of new houses is large and the planning approval for fourth - generation houses is relatively loose, resulting in a mess in the second - hand housing markets in Shunyi and Daxing.

If we only look at the data of land auctions and the sales volume of new houses, it may seem that the market has stabilized or even recovered. However, the perception based on the surface data of the land market and sales volume is completely different from the real experience of homeowners with second - hand houses.

Moreover, 58 Anjuke monitors the listed prices of second - hand houses, and the actual transaction prices are even lower. For example, in many sectors in Chaoyang, many houses are listed at over 70,000 yuan per square meter on the surface, but the actual transaction price is about 50,000 yuan per square meter. This unit price is about the level of 2016 or 2017.

In Shanghai, the gap between the transaction price and the listed price after the last adjustment is about 6.2%.

In Hangzhou, where the land auction was the hottest in the first half of the year, the average price of second - hand residential properties sold through real - estate agents was 29,182 yuan per square meter, a year - on - year decline of about 0.3%. According to the data from the Shell platform, the current number of listed second - hand houses exceeds 180,000, and about 30,000 houses are having their prices reduced every month. Among them, in the Shenhua and Qianjiang Century City sectors with extremely high transaction popularity, the proportion of price - reduced second - hand houses still accounts for about 85%.

Therefore, we can draw a conclusion: the investment in incremental construction and new starts can no longer drive the second - hand housing markets in major cities. Throwing money into the second - hand housing market is ineffective.

The following figure shows the data on the price changes of new and second - hand houses in 100 cities nationwide monitored by the China Index Academy since 2021 (as of May 2025).

Data source: China Index Academy

It can be seen that before 2023, the price trends of new and second - hand houses were almost the same. However, since 2023, the differentiation between the two has accelerated.

Comparing the land transfer situation in 300 cities nationwide, you will find that after 2024, the year - on - year change in land transfer fees is significantly greater than the increase or decrease in the prices of new houses in the above figure.

Data source: China Index Academy

Therefore