A property market recovery is likely to emerge in many cities in early spring, thanks to the central government’s resolve to keep the market healthy and stable, coupled with heightened expectations of more supportive measures from local governments, industry experts said. With the property market entering its traditional sales season in March and April, hopes for a boost in spring sales have been raised by multiple factors including positive signals emanating from the parliamentary meetings in March, the effects of supportive measures announced by major cities, and the gradual recovery of market expectations and confidence. The Government Work Report, delivered in March at the second session of the 14th National People’s Congress (NPC) outlined key tasks for the property sector, including defusing risks in the property market, accelerating efforts to foster a new development model for real estate, and increasing the construction and supply of government-subsidized housing.
Chen Zhixu, Senior Manager of CBRE China Research, expects a greater balance will be achieved between supply and demand under the new property development model. “The report also reaffirmed taking action on urban regeneration, which would help optimize supply and promote the release of potential buyer demand,” she said. Shaun Brodie, Director of Research on the Chinese market at Cushman & Wakefield, a global real estate services firm, said two phrases – “new urbanization” and “green and low carbon development” – had caught his eye. “I think both these key phrases will impact the real estate market in China immensely in the future as cities continue to improve the quality of life for their citizens and move toward their net-zero carbon goals,” Brodie said. The principle “housing is for living in, not for speculation” will continue to define long-term arrangements for the residential housing market in China, Brodie said, ensuring rational, steady and healthy development of the residential housing market in China.
“To my understanding, ‘housing is for living in, not for speculation’ is the premise of the new development model of the property market,” said Yan Yuejin, Director of the Shanghai-based E-house China Research and Development Institution. “Under such a principle, various related industries will coordinate and join forces to build the new pattern. This gives the parties involved inspiration,” he said.
One of the cities that has taken proactive measures to invigorate its property market is Hangzhou, capital of Zhejiang province. Hangzhou, famous for its picturesque West Lake, announced on March 14 it is scrapping all purchase restrictions on pre-owned homes. Local governments have been granted full decision-making power in optimizing their macro-control policies for the stabilization of the market. The gradual relaxation of the purchase restrictions will start in city outskirts before expanding to urban centers in first-tier cities, and smaller cities are likely to take greater supportive measures than big cities. Beijing is going to take different measures on a district-by-district basis in the optimization of its housing policy, Xia Linmao, Executive Vice Mayor of Beijing, said at a news conference on March 19.
Chen Wenjing, Director of Research with the China Index Academy said a range of different property-buying measures have already been rolled out across China. In late January, Shanghai revised its home buying requirements by allowing eligible non-local individuals to buy one residential apartment each outside the city’s downtown area. Shenzhen and Guangzhou in Guangdong province as well as Suzhou, Jiangsu province, also modified related housing policies ahead of the Chinese New Year. Some positive signs relating to the property market were seen in the National Bureau of Statistics (NBS) data released in mid-March. “In month-on-month terms, the new home price index drop in 70 major Chinese cities has been narrowing for three consecutive months,” Yan said. “Given the continuous supportive measures from local governments, buying enthusiasm as well as home sales volume, both picked up in March, making us believe home prices stabilization is on a solid footing,” Yan said, as reported by the China Daily.
