Summary of the News in Plain Language
This report essentially makes it clear to everyone that the “wild growth era” of China’s real estate industry has come to an end. In the past, the company that was the bravest in borrowing money, acquiring the most land, and achieving the highest sales figures was considered the industry leader. However, the rules of the game have changed; the focus is no longer on “who can run the fastest” but on “who can run the most steadily, avoid mistakes, and actually build quality homes that people are willing to buy.” The report uses Jianfa International, which has currently risen to fifth place in the industry, as a typical example to illustrate the new strategies adopted by leading real estate companies. These strategies cover every aspect of the business process—from financial stability, land acquisition, product development, to home delivery—aiming to minimize potential risks and navigate through economic downturns. This approach also points the way for the entire industry in the future.
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Detailed Analysis by Dimension
1. Complete Reversal of the Industry’s Fundamental Logic: The KPIs for Real Estate Companies Have Changed
Many people haven’t realized that the “default rules of the game” that have governed the real estate industry over the past 20 years are no longer valid. In the early days, the key competitive advantage for real estate companies was the ability to leverage debt. They would acquire land in any city, regardless of its location, as long as they could borrow money from banks. Sales figures would increase year by year, and it didn’t matter if the debt exceeded several times their assets, as long as housing prices continued to rise and they could borrow new money to repay the old debt. However, with the industry undergoing significant adjustments, the companies that once focused on expanding rapidly are now facing problems. Some have gone bankrupt, while others are burdened with massive debts and unable to move forward. Homebuyers are more cautious about purchasing, and banks are reluctant to lend to companies with high leverage. As a result, “large scale” has become a synonym for risk.
The new industry benchmarks focus on whether a company can survive, avoid bankruptcy, and deliver homes to customers on time. The “scale race” of the past has transformed into a “competitiveness race in terms of stability and operational efficiency.”
2. The First Level of Certainty: Ensuring Stability First
For real estate companies, financial stability is no longer just a basic requirement; it has become a core competitive advantage. Jianfa International’s financial data demonstrates this: its average interest rate on loans is only 3%, which is lower than the mortgage rates for many first-time homebuyers. Its net debt ratio is 22.1%, meaning that the total debt is less than one-fifth of its total assets. In contrast, many bankrupt companies have net debt ratios over 100%, with debts exceeding their assets. Additionally, Jianfa holds 61.8 billion yuan in cash and has received 61.7 billion yuan in sales revenue in the first half of the year, indicating it has access to hundreds of millions of yuan in liquid funds. It is backed by the Fortune Global 500 company Jianfa Group, which ensures it won’t face difficulties in funding its projects. While other companies are cutting costs and selling assets to repay debts, Jianfa can carefully select high-quality projects.
3. The Second Level of Certainty: Strategic Land Acquisition
In the past, real estate companies would acquire land indiscriminately, often ending up with unsold inventory in less desirable areas. Jianfa, on the other hand, acquires land only in areas where it is certain it can sell it. In the first half of 2026, 100% of its land acquisitions were in first-tier and second-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Nanjing, and Suzhou. It focuses on well-established and popular areas in these cities. Over 84% of its land reserves were acquired after 2022, with no significant amount of land from less desirable suburban areas. These core areas have industries and populations, creating a strong demand for housing. For example, its new project in Xiamen sold out within three months, with average prices reaching 26,500 yuan per square meter—well above the industry average. Jianfa has a market share in the top 10 in 38 cities nationwide, making it the first choice for homebuyers looking for quality homes.
4. The Third Level of Certainty: Addressing Homebuyers’ Concerns
Homebuyers are no longer easily deceived by promises of luxurious features or excellent facilities. Jianfa has moved quality control to the forefront, allowing residents to monitor construction progress and inspecting every aspect of the building process before delivery. This ensures that the homes delivered meet high standards, reducing the likelihood of disputes. As a result, Jianfa has a positive reputation among customers, which leads to more repeat business and eliminates the need for expensive marketing campaigns.
5. Practical Advice for Homebuyers
When choosing a real estate company, consider the following criteria to avoid pitfalls:
- Check the company’s financial data; prefer those with low borrowing costs and sufficient cash to cover short-term debts.
- Ensure that the land acquired is in core areas of your desired city.
- Look at the reputation of previous projects, especially for any issues with disputes or quality issues.
Following these criteria will help you avoid common problems associated with real estate purchases.