The latest local housing fine tuning policies are taking effect with improved market activity in major Chinese cities, leading to expectations of the stabilization of the property market, industry experts said. “In the new home market, about 1,302 apartments were traded on average per day among the key 13 cities during the Dragon Boat Festival holiday, soaring 172.54% (or 478 units per day) from that seen during the May Day holiday,” said the Zhuge Real Estate Data Research Center. “The significant increase comes after supportive measures were announced by the Chinese government on May 17 and various local level fine-tuning moves, indicating that policies were effective in increasing demand and promoting transactions,” said Guan Rongxue, Senior Analyst at the Zhuge Real Estate Data Research Center.
During the three-day-long Dragon Boat Festival, Shanghai’s residential property sector saw upbeat sentiment among potential buyers as both daily inquiries and visits related to existing homes rose 30% from the days before May 27, when a nine-item policy was released by the local municipal government, said the Shanghai Lianjia Research Institute. “Since Shanghai announced measures to further free up the housing market in late May, our workload grew 40% to 50% due to soaring inquiries and visits from potential clients, and the trend continued during Dragon Boat Festival,” said Yang Chen, an agent with Sinyi Realty in Shanghai’s Jing’an district. He also discovered an evident increase in buying budgets.
“Before the new policies, many clients preferred to buy homes without applying for mortgages, as they did not want to sacrifice their living standards. But now, more people want to apply for loans as mortgage rates and down payments have dropped,” Yang added. “These new measures have precisely targeted rational home buying demand in the market, including inelastic demand and reasonable requirements for moving to better homes,” said Lu Wenxi, Market Analyst at Centaline Shanghai. Shanghai expressed strong support for the local housing market on May 27 by announcing measures to scrap some purchase restrictions, optimize credit policies, encourage trade-in activities and improve land and housing supplies. Lu expects Shanghai to see double-digit transaction growth in June from the previous month, and transaction volume in the second half will be better than in the first. “The worst time for home transactions has passed,” said Lu.
In the five key cities Zhuge Real Estate monitored, a total of 933 pre-owned flats were traded during the Dragon Boat Festival period, up 40.72% from a year ago, and surging 232.98% per day in comparison with the May Day holiday, said Guan.
