2025 Real Estate Industry Outlook: Debt Relief Effectiveness Takes Hold, Operational Upgrades Drive New Industry Growth Points

**　　Introduction**

**　　In 2025, as the real estate industry undergoes deep adjustments and steadily moves into a new stage of improving inventory quality and high-quality development, “bottoming-out and repair, with intensifying differentiation” has become the industry’s core theme throughout the year. The policy front has continued to release positive signals; the task of ensuring timely delivery of completed homes has been fully accomplished; the pace of deleveraging and debt reduction has been accelerated. The industry is gradually shedding the old model of high leverage and rapid turnover, and is shifting toward a virtuous development track characterized by stable finances, strong operations, and multi-party coordination.**

**　　Against this backdrop, the financial soundness, debt-reduction capability, and strength in diversified operations of property developers have become the core support for crossing cycles and achieving sustainable development. And leading enterprises represented by Longfor, using steady operating practices as learnable benchmark models for the industry’s high-quality development, have demonstrated the positive momentum of industry transformation and its development potential.**

In 2025, with the real estate industry’s deep adjustment and structural stabilization progressing in parallel, its development logic has clearly changed.

From the perspective of the overall industry, market challenges remain severe. Many property developers still face difficulties such as shrinking performance and margin pressure, but the pace of risk clearance has been accelerating, and positive development momentum continues to accumulate.

According to statistics, by 2025 the real estate industry’s cumulative resolved debt amount has exceeded RMB 1.2 trillion. The approach to debt reduction has shifted from passive extensions to substantive debt reduction, effectively improving the industry’s overall balance sheets, alleviating industry credit pressure, and laying a solid foundation for bottoming-out and repairing the industry.

At the same time, the policy front has continued to improve the regulatory “toolbox.” Early signs of a recovery in demand are emerging in core cities. New-style urbanization continues to advance, and there is broad room for optimizing and adjusting urban inventory. The public’s new expectations for “good housing” inject new potential into industry development.

Amid industry differentiation, “steady operations and diversified empowerment” has become the core path for property developers to break through, and also the core direction for the industry’s high-quality transformation. At present, enterprises that rely on a single development business and have weak risk resilience face greater challenges amid industry fluctuations. Meanwhile, those that have laid out diversified businesses in advance and adhere to financial discipline have gradually become the industry’s “minority,” guiding the industry’s transformation toward high-quality development.

The common characteristics of those “minority” enterprises are that, with cash flow at the core, they optimize the debt structure and reduce the scale of debt, while also going deep into operations and services businesses, shedding reliance on a single development business, and building a business model that can withstand cycles. Longfor’s 2025 operating practice is a vivid embodiment of this industry trend, providing the industry with replicable and scalable practical experience.

**　　Debt-reduction efforts strengthen the industry’s foundation; benchmark practices point the way for transformation**

Debt resolution and reduction is the core proposition for risk clearance in the real estate industry in 2025 and for achieving high-quality transformation. It not only concerns the survival and development of property developers themselves, but also affects the repair of industry credit conditions and the rebuilding of market confidence.

From the perspective of the industry, debt reduction has moved from “rescuing in distress and saving lives” to “improving quality and increasing efficiency.” Property developers can only free themselves from liquidity difficulties by orderly reducing the overall debt scale, optimizing the debt structure, and lowering repayment pressure. Only then can they allocate more resources to core businesses and realize a transformation to healthy operations. This is also the key prerequisite for enterprises to stand firm amid industry differentiation.

In 2025, more than twenty at-risk real estate enterprises have completed debt restructuring or reorganization approvals. Debt-reduction models include diversified paths such as coordinated restructuring both domestically and overseas and judicial reorganization. The trend of accelerating industry risk clearance has become evident. As for Longfor’s debt-reduction practice, it aligns with the industry’s core direction of “substantive debt reduction and structural optimization.” Its experience carries important value as an industry reference and provides a benchmark sample for steady debt reduction.

Judging from Longfor’s 2025 financial report data, by the end of the year the group’s total consolidated borrowings amounted to RMB 152.8 billion, down RMB 23.5 billion from the end of the previous year. This achieved steady reduction of the debt peak and follows the industry development direction of “substantive debt reduction.”

In terms of debt structure, the group’s average contractual borrowing tenure is as long as 12.12 years, and the advantage of a higher proportion of long-term debt is significant. This effectively reduces short-term repayment pressure, which highly matches the industry’s debt-reduction thinking of “optimizing debt maturities and easing short-term liquidity pressure.”

In addition, regarding financing costs, in 2025 Longfor’s average financing cost further decreased to an annual interest rate of 3.51%, a clear drop compared with 2024. Against the backdrop of a declining debt scale, interest pressure was further released, demonstrating a feasible industry path of “debt reduction with low costs.”

It is worth noting that strengthening short-term repayment capacity is an important safeguard for the industry’s debt-reduction work, and also the foundation for steady operations by property developers. Longfor’s data at the end of 2025 shows that the group’s debt due within one year was RMB 15.79 billion, accounting for only 10.3% of total debt, keeping short-term repayment pressure within a controllable range. Meanwhile, the group’s cash on hand was RMB 29.2 billion, including pre-sale regulatory funds of RMB 9.37 billion. After excluding pre-sale regulatory funds and restricted funds, the cash-to-short-debt multiple was 1.14x, ensuring full coverage of short-term debt repayment.

This debt-reduction model of reducing scale, optimizing structure, and strengthening protection not only enabled Longfor itself to achieve continuous alleviation of debt pressure, but also provided a clear reference for other property developers in the industry. From Longfor’s operating practice, debt reduction is not passive “lying flat,” but rather achieving “risk that is controllable and operations that are sustainable” through scientific financial management—this is also the core direction of the industry’s debt-reduction campaign.

**　　Cash flow at the core, diversified empowerment to activate industry resilience across cycles**

At a time when the real estate industry’s transformation has entered deep waters, sustained and stable cash flow is the lifeline for the industry to withstand fluctuations and steadily advance its debt-reduction work. The coordinated push of diversified businesses, meanwhile, is the core strategy for the industry to get rid of reliance on a single development business and enhance its resilience across cycles.

Today, “cash flow is king” has become a consensus in the industry. By engaging in refined operations, focusing on inventory de-stocking, and optimizing business structure, property developers can stabilize cash flow, thereby providing solid support for debt reduction and transformation.

At the same time, as the market transitions from scale expansion to quality improvement, operating-services businesses such as commercial operations, property services, and asset management—leveraging their advantages of stable cash flow and strong resilience across cycles—have become a new growth engine for the industry. They help the industry build a sustainable profit model, which also reflects the specific implementation of the Ministry of Housing and Urban-Rural Development’s proposal of “grasping two overall plans and promoting high-quality development.”

Longfor’s 2025 operating practice precisely aligns with the industry’s general development direction of “cash flow at the core and diversified empowerment,” and has therefore become a benchmark in high-quality operations in the industry.

In cash-flow management, Longfor adheres to the operating philosophy of “cash flow is king.” In line with the industry’s direction of “refined operations and focusing on de-stocking,” its development business follows a make-to-order strategy—production based on sales—adjusting the pace of launching projects flexibly. It focuses on inventory de-stocking. In 2025, it achieved contract sales of RMB 63.16 billion. Of this, sales in first- and second-tier cities accounted for approximately 90%. The advantageous positioning in core cities ensures stability in sales collections, which offers a reference for property developers in optimizing sales layouts and safeguarding collection of proceeds.

In addition, Longfor delivered a total gross floor area of 5.925 million square meters of properties throughout the year. It implemented a “four-good” delivery system, winning market recognition with high-quality delivery. This has formed a virtuous cycle of “sales—delivery—collections,” which is highly consistent with the industry’s direction of “ensuring timely home delivery, strengthening performance fulfillment, and building confidence.” It also provides strong support for the industry to restore market confidence.

In terms of its diversified business layout, Longfor’s practice further aligns with the industry’s transformation direction of “diverse coordination and enhanced resilience across cycles,” opening a path for sustainable development for the industry.

In 2025, more and more property developers in the real estate industry have begun exploring light-asset businesses such as commercial operations, property services, and asset management to find a second growth curve. Longfor has already completed its diversified business layout. Its operating and service business revenues totaled RMB 26.77 billion, accounting for 27.5% of total operating revenue—becoming the core engine for growth and a resilience support.

Among them, as of the end of 2025, shopping malls already in operation generated annual rental income of RMB 11.21 billion, up 4% year over year. It had accumulated operations of 99 malls, and the occupancy rate remained at a high level of 97%. The asset management business achieved revenue of RMB 2.98 billion for the year; the long-term rental apartments brand “Guan Yu” had an end-period occupancy rate of 94%. The property services business achieved revenue of RMB 11.23 billion, with approximately 360 million square meters under management at year-end.

The steady performance of these operating and service businesses not only provides Longfor with stable cash flow, but also validates the importance of diversified business coordination in offsetting industry volatility and enhancing resilience across cycles. It also offers valuable experience for property developers’ transformation of the “development + operations” model and for unlocking and revitalizing inventory assets.

**　　The industry is turning favorable with resilience; benchmark leadership charts a new chapter**

In 2025, the real estate industry achieved risk clearance and momentum conversion amid deep adjustments. The results of the debt-reduction campaign were remarkable, diversified operations showed solid momentum, policy support continued to be strengthened, and the market is gradually moving onto a virtuous track of high-quality development.

If we look back from the industry perspective, the task of ensuring timely delivery of homes was fully completed, delivery risks were greatly narrowed, and the industry’s credit environment kept improving. The policy framework has become increasingly complete: from boosting demand to optimizing the supply side, a stable and diversified policy toolbox has taken shape. The macroeconomy is growing steadily, which boosts consumer confidence and provides strong support for releasing real estate demand. At the same time, with cities accelerating renewal and the promotion of “good housing” construction, new growth opportunities for the industry are being generated, opening up broad space for property developers’ transformation and development.

Longfor’s steady operations and high-quality development in 2025 are not only the results of the company staying true to its initial intent and planning scientifically, but also reflect the core logic of the industry’s high-quality transformation—adhering to financial discipline, strengthening the cash-flow foundation, and going deep into diversified operations. This is also the core direction of industry development.

Looking ahead, as industry policies continue to be optimized and risk clearance continues to advance, the real estate industry’s development outlook will keep improving. More and more property developers will learn from the experience of benchmark companies, adhere to the philosophy of steady operations, optimize their financial structure, go deep into diversified businesses, and focus on high-quality operations. They will break away from reliance on a single development business and build a business model that is resilient across cycles.

Under the guidance and demonstration of benchmark enterprises such as Longfor, the entire real estate industry is expected to accelerate its high-quality transformation, get rid of the impact of short-term volatility, return to the original essence of residential living, and balance people’s livelihood needs with industry resilience.

(Editor: Jiao Yue)

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