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E-mail Xinhua, June 23, 2024
This photo taken on March 15, 2024 shows the construction site of a residential complex under an urban renewal project in Jing'an District of east China's Shanghai. [Photo/Xinhua]
Major Chinese cities have witnessed more signs of warming in the housing market since the government rolled out a combination of policies to prop up the property sector a month ago.
Improved buyer sentiments were observed in cities including Shanghai, Guangzhou, Chengdu, and Hangzhou with a significant increase in inquiries and deals. While the market response has been positive, analysts said more time is needed for the policy effect to fully manifest and the sector still remains in an adjustment phase.
China on May 17 announced new policies to stimulate home purchases, ranging from lower minimum downpayment ratios and the cancellation of mortgage rate floors for first and second homes.
Moreover, local state-owned enterprises are encouraged to buy homes for affordable housing initiatives, and struggling developers may receive more financing support to complete ongoing projects and meet home delivery targets.
Recently, multiple new housing projects in Shanghai saw notable increases in subscription rates and customer visits.
In a crowded showroom in Pudong District, an unnamed sales manager said the influx of potential buyers resulted from the relaxed purchase restriction policies.
By mid-June, the city registered 14,730 existing home deals -- surpassing the average monthly level from the previous five months -- since May 28, when local favorable property measures kicked in.
In Hangzhou, east China's Zhejiang Province, the number of second-hand home purchase contracts increased 10 percent from May 31 to June 13 on the KE Holdings Inc. platform, a leading real estate services provider.
The data was "a positive sign that the market vitality continued to improve," said Shangguan Jian, president of the Hangzhou research institute of KE Holdings.
Similarly, Guangzhou, south China's Guangdong Province, also saw a clear recovery in the housing market. During the Dragon Boat Festival holiday from June 8 to 10, the sales of new homes stood at about 20,000 square meters each day, marking a 6 percent increase from the same period a year ago, data from the China Index Academy showed.
The market recovery in first and second-tier cities was mainly driven by robust demand from new residents and young people seeking stable homes for marriage or children's education, said Li Yujia, chief researcher at the Guangdong Housing Policy Research Center.
Li emphasized that loosening policies have unlocked accumulated purchasing power previously constrained by policy limitations, insufficient credit support, and cautious market sentiment.
As it has only been a month since this round of policies came into force, some analysts and industry insiders still anticipated further observation of the policy effects.
Wu Wenhui, a real estate agent in Jiaxing, Zhejiang Province, said the wait-and-see attitude still lingered among buyers. Huang Xue from the China Index Academy's Sichuan branch called on more efforts to further revitalize the market, such as improving policies on land reserves and more swiftly pushing for trade-ins of commercial homes.
The government in the next step should continue to fully implement existing policy measures and stimulate effective demand in a bid to help stabilize the housing market, said Yu Xiaofen, head of the real estate research institute at the Zhejiang University of Technology.
