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A woman walks past an Evergrande Group residential complex called Evergrande Palace in Beijing on Jan. 29.GREG BAKER/Getty Images

In his famous, profanity-laced rant from Glengarry Glen Ross, Alec Baldwin’s character exhorts employees at a struggling real estate firm to “Always Be Closing.” For decades in China, this was less a mantra for realtors than a statement of fact: They were always closing deals because there were always willing buyers, no matter a property’s cost, size, location or even whether construction had begun.

As late as last year, well into a real estate crisis that began in 2021 with the collapse of property developer Evergrande, Beijing-based realtor Zhang Yuan was closing at least one deal a month. So far this year, however, he has sold just two properties – and the second sale almost slipped through his fingers.

“The real estate market is obviously cooling down,” Mr. Zhang, 23, told The Globe and Mail. “The contrast with last year is huge.”

According to official data, China has some 390 million square metres of completed and unsold homes, equivalent to 6.6 Manhattans. One survey of 14 cities found the number of properties listed for sale was 20 times higher than the number of transactions that month.

A property bubble in the 2000s and 2010s saw local governments across China make huge amounts of money selling land to developers, who paid hefty premiums safe in the knowledge that apartments would be snapped up by investors. Real estate was seen as a safe bet as prices stayed high, and by the start of this decade, the property sector had grown to account for about a quarter of China’s GDP and a staggering 70 per cent of all household wealth.

Cautious steps to try to deflate the bubble had little effect, and officials were wary of alienating the mass of people whose savings were tied up in the value of their homes.

Finally, in 2020, the authorities – after warning for years that “houses are for living in, not for speculation” – introduced new limits on debt for developers, along with rules on mortgages and rent caps in some big cities.

Along with several other property developers, Evergrande promptly defaulted, with some US$300-billion in debt. This January, a Hong Kong court ordered the company to be liquidated; its founder, Xu Jiayin, is facing a criminal investigation.

By then, the real estate sector Evergrande once led was in freefall, with governments across China now trying desperately to support their local property markets, a key source of revenue. Nationwide, resales have dropped about 7 per cent year-over-year, while the price of new homes has fallen 11 per cent, according to official data.

In the past six months alone, Beijing’s local government has slashed down payment requirements, eased access to loans and lifted a decade-long restriction on the number of properties residents can own. According to research by The Globe, at least 20 other provinces and major cities have introduced or proposed similar measures. Meanwhile, China’s central bank has set up a US$42-billion fund to buy excess inventory from developers, with the intention of turning it into affordable housing.

“We see more homes being listed, but the number of actual buyers is far less,” said Mr. Zhang, the Beijing realtor. “The biggest concern for buyers is that the market is not stable, as house prices keep fluctuating. What should they do if the house they buy continues to depreciate? Nobody wants to see such a loss.”

Meanwhile, he added, many owners fear that “if they don’t sell their houses now, they will miss the last chance and won’t be able to sell at all.”

Ryan Liu knows this feeling well. In October, the 52-year-old listed an apartment he owns in Beijing for 4.2 million yuan ($792,000). Other homes in the area had sold for similar prices, records showed, and a few years ago the apartment would likely have been snapped up in no time, despite being in a relatively old building far from the city centre.

By April, however, a disgusted Mr. Liu took down the listing after receiving just two offers, both of which came in at a million yuan below the asking price.

“There have been too many housing policies introduced this year. The market is cost-effective for buyers, but for sellers it is too unfavourable,” he said. “I think that if I accept this crazy devaluation, I would definitely regret it in a few years.”

Still, he said he couldn’t help feeling some of the anxiety that is driving other sellers to take huge haircuts.

“Even though I say I don’t want to lose money, and I won’t settle for losing one million yuan, I still worry sometimes that the price could go even lower.”

With files from Alexandra Li in Beijing and Reuters

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