Green Building Opens Up a Trillion-Yuan Blue Ocean

Author | Zhou Zhiyu

Editor | Huang Yu

On the green building stage, the rules are being rewritten: the former teacher, Germany, is being surpassed by students from China.

This judgment comes from Berthold Kaufmann, the executive director of the Passive House Institute, known as the "father of passive houses." In September of this year, after visiting Aorun Shunda in Gaobeidian, Hebei, he bluntly stated that Germany's green building development is slow, while Chinese companies "have already taken the lead in the global industry."

Behind this change is the end of the "first half" of real estate, which relied on land, leverage, and scale. The criteria for judging a house are no longer location and area, but rather new value metrics such as air quality, comfort, and green energy efficiency.

A trillion-level game around "the future of housing" has already begun. Driving this game are strong policy pushes, demand pressures, and technological empowerment. The giants of the old world are still struggling in the quagmire of debt, while challengers from the new world have begun to explore entirely different paths to wealth.

A huge market opportunity built on real money is emerging. According to Guosen Securities' estimates, the direct incremental market size brought by green building standards during the 14th Five-Year Plan period is approximately 1.76 trillion yuan. The cake of existing renovations is equally tempting, with the market size potentially reaching 215 billion yuan by the end of 2025.

According to the latest estimates released by the China Architectural Energy Conservation Association at the beginning of 2025, the market potential for "Building Integrated Photovoltaics (BIPV)," once a niche sector, is expected to exceed one trillion yuan in China by 2030. This is just one slice of the vast industrial chain of future buildings.

The market explosion cannot be separated from the resonance of policy and demand.

On the policy side, from the promotion of mandatory standards for ultra-low energy consumption buildings to increased financial subsidies for the renovation of existing buildings, the enforcement is becoming stronger.

On the demand side, the unprecedented public attention to health in the post-pandemic era, along with China's accelerated move towards a heavily aging society, has transformed "smart health residences," which can actively monitor health, from an improvement demand to a core necessity.

In the broad track of green smart health buildings, every field, from green building materials and energy-saving systems to digital management services throughout the entire lifecycle, contains opportunities worth hundreds of billions.

Facing the blue ocean, challengers from the new world have explored entirely different paths to wealth.

Longfor has chosen to "lighten the load," packaging its years of expertise in green building technology into high-value-added services, providing output to the entire industry, with its business gross margin maintaining a double-digit level, proving that the market is willing to pay a high premium for genuine technical expertise.

Aorun Shunda, on the other hand, attempts to fundamentally redefine products by integrating life support technologies from aircraft and space capsules with medical technology into buildings. Its "space house" can achieve energy and water self-sufficiency in extreme environments, resembling a "life capsule." This disruptive product concept has also drawn praise from Diana Ürge-Vorsatz, vice-chair of the UN IPCC, who believes this model "takes energy efficiency and human-centered innovation to new heights." At the same time, leading players have quickly reached a consensus. According to CR Research, the construction of "good houses" is a strategic development direction for residential products, transitioning from policy concepts to industry practices, and will become a long-term development trend in the real estate market.

Leading real estate companies such as Poly, China Overseas, and China Resources have successively released their "good house" strategies, all based on four core dimensions: safety, comfort, green, and intelligence, extending to refined craftsmanship, service, low carbon, health, and other derived values, and achieving a closed loop through quantitative technical standards.

This marks a clear consensus in the industry: the competition in the second half of real estate is no longer about who can build more houses, but about who can provide residents with healthier and more sustainable living.

In the future, leading companies will no longer compete over the houses themselves, but over the service ecosystem built around the physical space of the house, focusing on who can provide residents with healthier, safer, and more sustainable living. This is also the reason why many companies continue to mine for opportunities in green, smart, and healthy buildings, as they see the trillion-dollar blue ocean created by the combined forces of technology, policy, and demand.

However, to win in this blue ocean, merely having green "hardware" is far from sufficient. Future leading companies must be a combination of high-quality buildings (hardware), intelligent systems (software), and health management (services). Houses will no longer be static commodities but will evolve into service platforms that accompany residents throughout their entire life cycle.

Whoever can first complete the transformation from developer to "lifetime service provider" will truly define the future of living and ultimately win this trillion-dollar game.

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