On September 24, CRIC Real Estate released its profitability report for property developers in the first half of 2025. During this period, typical listed real estate companies achieved total operating revenue of 1.287 trillion yuan, down 15% year-on-year, with operating costs of 1.145 trillion yuan, declining 16% year-on-year. After a brief recovery in 2023, operating revenue resumed accelerated decline in 2024, with the decline moderating slightly in H1 2025.
Gross profit has maintained a downward trend since 2021, with typical listed property developers achieving gross profit of 141.4 billion yuan in H1 2025, down 9% year-on-year. Regarding net profit and attributable net profit, due to declining revenue scale, asset impairments, and other factors, the industry's typical listed property developers have recorded substantial losses since 2022. Net profit losses expanded to 276.2 billion yuan in 2023, further widening to 339.7 billion yuan in 2024. In H1 2025, net profit losses reached 90.2 billion yuan, with attributable net profit losses of 95.4 billion yuan. The industry has recorded net losses for four consecutive years, presenting an unfavorable overall profitability outlook.
From profit margin indicators, typical listed property developers achieved an overall gross margin of 10.87% in H1 2025, up 1.8 percentage points from 2024. The net margin stood at -7.45%, indicating losses, while the attributable net margin was -7.9%. Excluding distressed companies and focusing only on 27 non-defaulted property developers, the corresponding gross margin was 15.09%, up 2 percentage points from 2024, with a net margin of 1.71%, reversing the 2024 net loss situation.
The reasons for industry profitability losses include: first, the continued impact of high land costs and low-profit projects acquired at historical peaks. Second, intensified sales pressure has led many developers to adopt discount promotions and "price-for-volume" strategies to ensure inventory turnover, exacerbating revenue growth without profit improvement. Additionally, amid industry downturn, property developers have made asset impairment or credit impairment provisions for inventory and receivables, along with fair value fluctuations in investment properties, significantly impacting current profit performance.
In H1 2025, real estate companies experienced dual decline in revenue and profitability, with industry net profits remaining in loss territory. This reflects declining profit margins from settled properties, impairment risks for inventory and payables, and losses from joint ventures and associates becoming significant factors in net losses.
Looking ahead to H2 2025, several leading property developers offered different perspectives during recent earnings conferences. Greentown management believes the industry is at a turning point of "three changes and three constants": "Policy orientation has shifted from deleveraging to risk prevention, demand has changed from broad-based growth to differentiation, and competition has transformed from scale expansion to quality competition. However, the long-term logic of urbanization remains unchanged, residents' pursuit of better living hasn't changed, and the fundamental tone of 'housing for living, not speculation' remains clear."
LONGFOR GROUP management stated that short-term trends still depend on policy stimulus intensity. After four years of deep adjustment, housing prices in many cities have fallen 30% or more from their peaks. Market stabilization concerns not only the industry itself but also macroeconomic and financial stability. Long-term, LONGFOR remains firmly optimistic, citing insufficient supply of quality housing in prime locations of tier-one and tier-two cities, strong resilience in upgrade demand, and that building good houses and providing excellent service remains a worthwhile long-term business.
Vanke management maintained a pragmatic tone, pointing out that new housing supply remains tight, with improving supply-demand dynamics providing conditions for market recovery. The current real estate market shows "easy incremental growth but difficult existing stock management," requiring "trading time for space" and patiently waiting for confidence restoration.
Meanwhile, as the real estate development industry undergoes deep adjustment, commercial operations and other businesses serve as cycle-resistant stabilizers, supporting corporate profitability. LONGFOR GROUP management indicated plans to open approximately 10 shopping malls in H2, with about ten new projects planned annually for 2026 and 2027. The entire commercial segment is expected to achieve over 10% growth in 2025. "We will firmly focus on 1+4, with C1 (commercial segment) gradually navigating through cycles, while the other four segments will firmly constitute a growth portfolio to jointly support overall group growth."
Simultaneously, CHINA RES LAND, China Merchants Shekou Industrial Zone Holdings Co.,Ltd., and Seazen Holdings Co.,Ltd. all mentioned plans to unlock existing asset value through public REITs.
Despite the current real estate market remaining in decline, the downward momentum shows marginal improvement with a narrowing decline range. Recent frequent positive short-term policies aim to promote faster market stabilization, making H2 2025 or 2026 potentially crucial years for market bottoming and stabilization. In this context, property developers must enhance core competitiveness through "precise investment, product upgrading, operational value-add, and asset turnover."
In development business, companies should balance resource flow and profit realization while implementing product quality improvements. In asset operations, they should focus on refinement, strengthen content operations, and accelerate benefit contributions.