The market confidence of home buyers and the number of real estate transactions have been boosted after the central and local governments announced a number of supportive measures to stabilize the property market in recent months. Industry experts suggested more fine-tuning is in the pipeline to promote the stable and healthy development of the nation’s real estate market. In major Chinese cities, some indicators signal a turning point in the home market, such as shrinking residential property inventories, more active land supply and trading, and more visits from potential homebuyers. Experts believe that China’s property market has shown signs of bottoming out after three years of adjustments.
“Since the end of September, we’ve noticed a significant increase in both visits to new projects and signing of sale contracts, and transactions of pre-owned homes have also gone up,” said Minister of Housing and Urban-Rural Development Ni Hong during a State Council Information Office news conference on October 17. “China’s real estate market has started bottoming out after three years of adjustment,” Ni added.
James Macdonald, Director of Savills Research China, welcomed the latest policies. He said they “not only provide broader support for the real estate sector, but also aim to boost the overall economy. These policies are crucial for instilling household confidence in job security and encouraging home buying decisions,” Macdonald said. Since September, policy adjustments have mainly focused on relaxing home purchase restrictions, lowering down payment ratios, and reducing interest rates. “These measures aim to ease the qualification requirements and financial burden for homebuyers, thereby stimulating the steady recovery of the residential market,” said Shaun Brodie, Manager of research content on the China market at Cushman & Wakefield. “This will not only help adjust the market’s expectations for the future, but also further stimulate the release of housing demand,” Brodie added.
These policies have quickly demonstrated their impact, with both new and second-hand home transactions showing growth. “Residents’ confidence in purchasing homes is gradually recovering, and it is expected that the positive effects of the new policies will continue to emerge in the near future,” he said. “The unparalleled frequency of supportive policies is in line with the spirit of the Communist Party's Politburo meeting on September 26, which stressed that efforts will be made to stabilize the property market and reverse its downturn,” said Xie Chen, Research Director with CBRE China. “Based on their respective conditions, including social development, population, industrial layout and housing supply and demand, cities will be able to make adjustments on demand and property financing, scientifically arrange land supply, and better allocate financial resources,” Pang Ming, Chief Economist at JLL China, said.
“Chinese cities’ home prices had been stable in September from a month earlier, though home prices had dropped year-on-year. Our survey indicates market confidence is back and market expectations have improved since late September,” said Wang Zhonghua, Statistician with the National Bureau of Statistics’ Urban Division. According to Wang, the monthly survey conducted in late September by the Bureau showed that among the nation’s 70 major cities, 58.3% of the polled respondents expected new home prices to grow or remain stable in the next six months, up 10 percentage points from August, and 45.4% of the respondents said they were positive on pre-owned home prices, up 6.5 percentage points month-on-month. Brodie said the September data indicates the increased confidence and improved expectations about the real estate market. “In September, among the 70 large- and medium-sized cities, house prices generally stabilized on a quarter-on-quarter basis. Due to the release of improvement demand, the month-on-month price growth in Shanghai had been the highest in the country for seven consecutive months,” he said.
Some restrictions on home buying are expected to remain in first-tire cities, although Guangzhou in September became the first first-tier city to lift all home purchase requirements. “Mega-cities like Beijing and Shanghai may not fully lift purchase restrictions in their central districts. However, they may do so in suburban areas or specific development zones. Cities like Guangzhou and Shenzhen, on the other hand, are more likely to fully lift purchase restrictions,” Shaun Brodie said. Chen Sheng, President of the China Real Estate Data Academy, pointed out that there is a unique phenomenon in the housing market: once super-sized cities totally repeal home purchase restrictions, buyers in neighboring cities will rush to buy homes there, leaving unsought properties in the surrounding smaller cities. “To prevent such a scenario, mega cities won’t fully remove their home buying restrictions. The easing policies is closely connected to the recovery of the housing market in surrounding cities,” Chen said. “Governments at all levels will continue to optimize and adjust their respective policies in a timely manner in accordance with their conditions, but eliminating all existing home purchase restrictions in China’s first-tier cities is unlikely in the near future,” said Pang Ming, Chief Economist for JLL China, as reported by the China Daily.
