According to data released on September 22nd by CRIC Real Estate Research, based on first-half 2025 data published by typical enterprises, the total book value of inventory reached 8.14 trillion yuan, declining 4.6% from 8.53 trillion yuan at the end of 2024. Inventory scale has shown negative growth trends for consecutive years since 2022, now entering its fourth year. Comparing the decline rate over the six-month period, the pace of total inventory scale reduction has slightly moderated compared to the 5.1% decline in the first half of 2024.
Looking at different tiers, the inventory decline rates for various tier real estate companies were basically comparable to last year. Among them, TOP31-50 and TOP51-100 companies showed the largest declines, falling over 7% from the beginning of the year, while TOP10 companies had the smallest decline at 2.3% from the beginning of the year, mainly due to relatively stable investment, construction starts, and sales performance among leading companies, resulting in relatively smaller inventory changes.
From an ownership perspective, central state-owned enterprises' total inventory remained basically flat compared to last year by the end of the first half of 2025, with a decline of less than 1%, mainly due to central SOEs selectively acquiring more quality land parcels in core cities during the first half of this year. Among central SOEs, CHINA JINMAO (00817), China Merchants Shekou Industrial Zone Holdings Co.,Ltd. (001979.SZ), and CHINA RES LAND (01109) even saw varying degrees of inventory increases compared to the beginning of the period.
CHINA JINMAO acquired 16 new land parcels in the first half of 2025, all located in first and second-tier cities, with new land reserves totaling 1.45 million square meters in gross floor area and total land costs of 49.2 billion yuan, achieving a land acquisition to sales ratio of 0.92. Investment in Beijing and Shanghai reached 32.4 billion yuan, accounting for 66% of the total.
Based on first-half 2025 data from typical enterprises, inventory under development totaled 4.61 trillion yuan, declining 7.0% from 4.95 trillion yuan at the beginning of the period. The trend of inventory under development basically aligned with total inventory trends, both showing negative growth since 2022. However, looking at the decline rate over the six-month period this year, it was basically comparable to last year (7.3% decline in the first half of 2024), with no signs of moderation in the pace of inventory under development decline.
As of the end of the first half of 2025, typical real estate companies' completed inventory stood at 1.77 trillion yuan, declining 3.4% from the beginning of the year, again showing short-term decline, which was better than the same period last year (completed inventory grew 2.6% in the first half of 2024). Although we have observed similar "mid-year decline but year-end growth" fluctuation patterns in historical data, we can see that since real estate companies began consciously controlling inventory scale and completed inventory risks from 2020, the annual growth rate of overall completed inventory for typical companies has been controlled within 20% since 2021.
Nearly 30% of inventory consists of completed property stock, with pressure from completed property inventory growth rate slowing. The proportion of completed inventory reached a new high, with growth rate moderating compared to the same period last year. From an inventory structure perspective, the proportion of completed inventory for sample real estate companies in the first half of 2025 reached 26.9%, continuing to increase by 0.5 percentage points from the beginning of the year, reaching the highest level in nearly five years.
The proportion of completed properties has been continuously rising in recent years, but in current interim reports, we seem to see signs of improvement. The current increase in completed property proportion is declining, with the proportion at the end of the current period only rising 0.5 percentage points from the beginning of the period, lower than the 1.2 percentage point increase in the same period last year (1.7 percentage point increase in the first half of 2024). Considering that real estate companies' project completion schedules are still mainly concentrated in the second half of the year, pressure from completed property sales still exists.
Inventory provision scale remains at high levels, with inventory impairment ratio approaching 5%. Looking at changes in inventory impairment provision balances for 19 A-share real estate companies among 50 typical companies, the fastest growth occurred in 2021-2022, with year-on-year increases of 69.2% and 82.5% respectively. Growth rates have moderated since 2023, with inventory impairment provision balances reaching 159.8 billion yuan by the end of the first half of 2025, declining 0.8% from the beginning of the year.
However, from historical data, the absolute decline in inventory impairment provision balances in the interim period does not mean inventory impairment provisions are coming to an end. We can see that inventory impairment balances in the first halves of 2022, 2023, and 2024 all showed temporary declines, but annual data for these three years still showed increases, which we estimate is largely related to companies' construction start and completion schedules.
Inventory provision pressure continues to rise, with inventory impairment ratio approaching 5%. The inventory impairment ratio for 19 A-share companies among sample real estate companies by the end of the first half of 2025 was 4.67%, increasing 0.25 percentage points from the beginning of the year, higher than the increase in the same period last year (0.05 percentage point increase in the first half of 2024), with inventory impairment pressure remaining at relatively high levels.
Looking at year-end inventory impairment ratios by different enterprise ownership types, private real estate companies' asset impairment is currently at peak levels. Since 2021, private enterprises have consistently had the highest inventory impairment ratios among all tiers. As of the first half of 2025, private real estate companies' inventory impairment ratio was 13.12%, far higher than the average level of typical companies. This tier's inventory impairment ratio increased 1.29 percentage points from the beginning of the period, also the largest increase among all tiers.
Looking at other tiers, central SOEs had the lowest inventory impairment ratio at 2.71%, while state-owned enterprises and mixed-ownership real estate companies both had inventory impairment ratios around 4%. With market changes in recent years, real estate companies have become increasingly determined to provide impairment discounts for products that don't meet current demand, with some products being provisioned for impairment even before completion. On one hand, companies provide space for discounted acceleration of sales for problematic projects through impairment, while on the other hand, they cautiously acquire quality land parcels and develop improved residential properties to preserve profit margins.
Investment continues to contract, inventory management becomes core competitiveness. As the main liquid asset of real estate companies, inventory's proportion of total assets reflects companies' balance between development speed and development safety. However, with market decline, inventory's liquidation capability directly relates to real estate companies' survival and development. Excessively high inventory asset proportions not only cause capital occupation due to "hoarding," increasing liquidity pressure, but also face impairment pressure, presenting significant challenges for companies.
By the end of the first half of 2025, inventory for 50 typical real estate companies accounted for 47.7% of total assets, declining 0.5 percentage points from the end of 2024, continuing the downward trend since 2023. Against the backdrop of continued market downturn and increased liquidity pressure, real estate companies are accelerating asset structure adjustments, shifting from scale-oriented to liquidity-priority approaches. More companies are reducing investment and accelerating sales, with both inventory scale and proportion contracting. "Traveling light" is increasingly becoming industry consensus.
Moreover, from current real estate company operations, investment and construction schedules will continue to decline controllably on one hand, while impairment provision preparations will also drive inventory price reductions and sales on the other hand. In the short term, the proportion of real estate companies' total inventory to total assets will continue to remain low or decline further.
The market is undergoing cyclical adjustment, and inventory, as an important liquid asset for real estate companies, serves as the foundation supporting continuous business development while facing uncertainties such as sales, revenue recognition, and impairment, potentially intensifying operational risks and pressure. Since 2022, real estate company inventory has continued declining. By the end of the first half of 2025, total inventory for 50 typical companies was 8.14 trillion yuan, declining significantly by 4.6% from the beginning of the year.
Meanwhile, inventory's proportion of total assets has also been continuously declining, from 52.2% in 2022 to 47.7%, with companies still accelerating sales, optimizing inventory structure, and reducing inventory accumulation. We can see that the weighted average inventory turnover rate for 50 typical real estate companies in the first half of 2025 was 0.28 times per year, accelerating by 0.03 times per year compared to the same period last year (0.25 times per year in the first half of 2024), though still below last year's full-year turnover efficiency.
Since major construction start and completion milestones are still in the second half of the year, under companies' efforts of "accelerating new project launches and reducing prices for old project sales," this year's full-year turnover efficiency still has potential for improvement. Notably, completed inventory proportion has approached 27%, rising to recent highs, but the overall upward pace is moderating, possibly due to companies' stronger determination to provide impairment provisions to improve inventory asset liquidity, especially increased impairment provisions for projects under construction, thereby pre-emptively selling some inventory through price reductions.
According to statistics, the inventory impairment ratio for 19 A-share companies among sample real estate companies by the end of the first half of 2025 was 4.67%, increasing 0.25 percentage points from the beginning of the year, higher than the increase in the same period last year (0.05 percentage point increase in the first half of 2024), with inventory impairment pressure remaining at relatively high levels.
After years of adjustment, real estate companies have gradually developed basically similar inventory management strategies: On the inventory side, facing accumulated inventory backlogs, they conduct proper inventory project assessment and planning, actively selling through methods like revitalizing old projects and providing impairment discounts. For undeveloped parcels that are difficult to sell, they coordinate with local governments to resolve issues through government land acquisition and resource exchanges.
On the investment side, based on available cash flow space, they focus on core land parcels in core cities or acquire land in cities where they have customer base advantages, quickly recovering funds through high turnover methods. For example, CHINA JINMAO proposed the "06101224" strategy to accelerate new project sales and rapid capital return, meaning projects achieve 6-month launch, 10-month positive shareholder cash flow, 12-month positive operating cash flow, and 24-month profit realization.