CHINA’S housing market reached a peak last year, according to one of the country’s biggest developers.

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

Shenzhen-based 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 giants reported declines in annual earnings Wednesday, with Vanke posting its first profit drop since the 2008 global financial crisis.

Vanke reported a net profit of 22.5 billion yuan in 2021, down from 41.5 billion yuan in the year-ago period, dented by lower gross profit margins in the development business, a drop in investment income and the provision for asset impairment losses.

Yu said he wanted to offer a “sincere apology” to Vanke’s 520,000 shareholders. “Our 2021 financial performances have disappointed our shareholders,” he said.

Yu said Vanke’s profit in 2022 may see some growth because it has 710 billion sales from last year that have yet to be booked, and the firm expects profit contribution from non-development businesses.

China’s developers are struggling with a downturn that has seen 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,” said Yu, who expects more policies to be introduced at the local levels to stabilize the property market.

(SD-Agencies)