Thirty percent of companies' market share stabilizes; real estate firms focus on "good houses" and the transformation to inventory management

Ask AI · Why can about 30% of real estate developers stay resilient amid industry reshuffling?

China Economic News reporter Lu Zhikun, Beijing

A special report released recently by the China Index Academy shows that in 2025 the national real estate market will still be in an adjustment period. Sales performance of the top 100 real estate companies is declining, but differentiation within the industry is intensifying.

At the recently held “2026 China Real Estate Top 100 Enterprises Research Results Release Conference,” the China Index Academy released the “2026 China Real Estate Top 100 Enterprises Research Report” (hereinafter referred to as the “Report”). The Report points out that amid liquidity pressure, the real estate industry has moved from a stage characterized by scale expansion and high leverage to a new stage centered on survival and high-quality development. In this process, developers focusing on layouts in core cities and transitioning to “good homes” and stock operations are stabilizing their fundamentals.

Liquidity management remains the top priority

The Report shows that based on various scale indicators, the industry as a whole is still bottoming out. In 2025, the total sales of the top 100 companies were 32,605.2 billion yuan, down 18.1% year-on-year; the sales area was 148.579 million square meters, down 24.3% year-on-year. Due to factors including reduced project delivery volumes, historical burdens, and asset impairment, the operating income of the top 100 developers has declined for two consecutive years, and the 2025 average fell to 321.6 billion yuan, down 6.5% year-on-year.

But amid the overall decline in data, some companies display strong operational resilience. The Report states that about 30% of companies have relatively stable market positions, with both their sales revenue and land acquisition amounts ranking within the top 100 in 2024–2025. These companies generally adopt a “invest based on sales” strategy, concentrating resources on high-quality segments in core cities and using product strength to deliver sales performance. By contrast, some companies with insufficient investment scale support or heavy historical burdens have weaker operational stability, and industry reshuffling is still ongoing.

A marketing executive from a central state-owned enterprise that ranks among the top ten in the industry told a reporter from China Business News that they remain cautious about investment, waiting for further signals from market sentiment—especially to clarify whether the current “early spring” market is a delayed release of last year’s demand or represents new incremental customers. He said the company is currently focusing on investment opportunities in cities such as Hangzhou, Chengdu, and Xi’an because the sales-to-investment ratios there are relatively more favorable.

“Our calculation before acquiring land is that the project needs to be able to open for pre-sales and sales within 6 months, and ideally be able to sell 80% of it at the time of opening. If the project still hasn’t cleared inventory within 1 year, then internally this project can basically be considered a failure. The next time this city wants to approve land for development again, the group has to consider whether it still wants to proceed based on its recommendation.” The marketing executive said that in today’s environment, maintaining investment flexibility and ensuring cash-flow safety is still the top priority for real estate developers.

This is also part of what the China Index Academy’s Report focuses on. The China Index Academy said that in the short term, ensuring liquidity safety remains the operational core for most developers. The Report estimates that in 2026 the bond maturity amount for real estate developers will reach 7311 billion yuan. The absolute scale remains high, and the traditional “using new debt to repay old debt” model has long been ineffective.

The China Index Academy recommends that developers should increase efforts to reduce inventory, actively seize policy opportunities to recoup funds—such as leveraging local governments’ acquisitions of existing commercial housing to use as affordable housing, and using special-purpose bonds to acquire idle land. At the same time, they should fully align with the “white list” mechanism and flexibly use interest-bearing debt extension tools to ease short-term repayment pressure.

Finding room for incremental opportunities

While resolving existing inventory risks, where is the industry’s incremental room?

Although the overall industry growth rate has slowed, there is still fundamental demand. According to the Report’s estimates, during the “15th Five-Year Plan” period, the total urban housing demand nationwide will be about 4.98 billion square meters. With population concentrating in key cities, household sizes becoming smaller, and aging trends deepening, improved-demand housing has become a core support for the new home market.

Based on this, building “good homes” that fit demand is key for developers to withstand cyclical pressures. Beyond incremental development, the industry is fully entering the stock era. The Report mentions that during the “15th Five-Year Plan” period, direct investment on areas such as renovation of old residential communities and urban renewal will be massive. Light-asset and operation service businesses—such as delegated construction, long-term rental apartments, commercial operations, and real estate funds—are becoming important directions for developers to break through the ceiling of development business and find new profit growth points.

“The ‘good homes’ we understand are no longer limited to a simple construction product. It is a systematic project that includes landscaping and green scenery, public service supporting facilities, property services, and social neighborhood relationships,” a relevant person from the Sichuan Tianfu New Area Park City Construction Bureau said in an interview with a reporter.

The official explained that as the first area to propose the “park city” concept, Tianfu New Area, over nearly 10 years of planning and construction, has formed a networked structure with large-scale openness and integration, where blue and green are interwoven. Currently, the proportion of ecological green space in the area is 72.1%. It has 77,000 mu of contiguous green land and river and lake water bodies, with a per-capita park area of 19 square meters and a road network density of 8.6 kilometers per square kilometer. This kind of regional ecological and infrastructure development essentially provides external support for developers to build “good homes.”

From a market logic perspective, the area is promoting a shift in thinking from the traditional “jobs-cities-people” approach to a “people-cities-jobs” mindset. The official told reporters: “Now, housing demand is not only demand for housing products—it is demand for a way of life.”

Given that developers are generally becoming more cautious in investment, local governments are also trying to connect the industry closed loop of “willing to buy homes, worth buying homes, willing to build homes” by optimizing the business environment. The official said that to help developers be willing to develop, Tianfu New Area starts from both elements and institutional levels to reduce developers’ development costs, establishes a “1+3+N” government-enterprise communication matrix, enables 100% online handling of government service matters, and improves enterprise operating efficiency by compressing approval timelines to an extreme. It also promotes linkage between land and real estate, accelerates project destocking, and allows funds within the region to circulate quickly, forming a virtuous cycle.

This micro-level local strategy is consistent with the “Report”’s proposed path of selecting core advantageous city sectors, maintaining appropriate investment levels, and reducing development costs to break the deadlock.

Industry participants generally believe that the era of relying on high leverage to scale up has ended. In the future, the core of competition among companies will be the ability to manage cash-flow safety, as well as deep refinement of fine-grained operations and product strength.

(Editor: Lu Zhikun; Review: Tong Haihua; Proofreading: Liu Jun)