Chinese Property Giant Says Housing Market Peaked Last Year

(Bloomberg) -- China’s housing market reached a peak last year, according to one of the biggest developers, in another setback for the beleaguered industry’s recovery.  

Property sales nationwide totaled about 18 trillion yuan ($2.8 trillion) in 2021 and are unlikely to exceed that level in the future, China Vanke Co. Chairman Yu Liang said at an earnings briefing on Thursday. 

Vanke was the second-biggest Chinese developer by sales last year, according to China Real Estate Information Corp., trailing only Country Garden Holdings Co. The two property giants reported declines in annual earnings on Wednesday, with Vanke posting its first profit drop since the 2008 global financial crisis. 

Read more on Country Garden and Vanke’s earnings 

China’s developers are struggling with a downturn stemming from a government deleveraging campaign that’s slowed construction and weakened sentiment among homebuyers. Home sales have been falling since July, and prices are also sliding. 

Yu blamed demographic trends for the market reaching its limit. China’s total population is about to see an “inflection point,” and the pace of urbanization has already slowed, he said.

“Vanke realized before that we have to rearrange business lines before the peak,” Yu said. 

Still, he said the home market will remain at least above 10 trillion yuan given China’s vast population, and real estate will remain Vanke’s main business even as it diversifies.

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With assistance from Bloomberg