October 12, 2022
SHANGHAI – Experts: Supportive policies, stronger sentiment to help realty get back on steady track in Q4
A number of Chinese cities saw pre-owned home transactions recover during the weeklong National Day holiday, while urban new-home sales remained tepid. But experts said that with policies gradually taking effect and home buying sentiment turning stronger, the sector is likely to stabilize in the fourth quarter.
During the holiday, the 50 key cities surveyed by Beike Research Institute reported a growth of about 54 percent year-on-year in daily preowned home transactions.
Beike said 90 percent of the 50 surveyed cities saw positive growth in existing home sales from a year ago. Dongguan and Foshan in Guangdong province; Chengdu, Sichuan province; Xiamen, Fujian province and Suzhou, Jiangsu province reported that housing unit transactions in the secondary market more than doubled.
The third-quarter survey by the People’s Bank of China, the central bank, said 17.1 percent of those polled said they have plans to buy a home in the coming three months, higher than the second quarter of 16.9 percent.
Among the 20,000 urban depositors from the 50 cities the central bank polled, some 15 percent said they expect home prices to rise in the following quarter, while some 57 percent believe there will be little change in housing prices.
“The consistency of property measures can activate home buying demand. As a result, some cities saw a transaction boost during the holiday,” said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.
Yan also attributed the improved performance in the pre-owned housing market to stimulus measures Chinese financial regulators introduced ahead of the holiday.
Taxpayers who purchased residential properties within a year of selling previously owned residential assets will receive tax refunds for the latter, the Ministry of Finance and the State Taxation Administration announced on Sept 30. The new policy became valid on Oct 1 through the end of 2023.
Also on Sept 30, the central bank said it would lower interest rates for housing provident fund loans by 0.15 percentage point for first-time homebuyers starting from Oct 1, while those for second-home buyers remain unchanged.
On Sept 29, financial authorities also said they would loosen the lower limit for mortgage rates for first-time homebuyers in certain cities.
Experts said the new home market is not yet on a recovery track. In the 20 key Chinese cities tracked by the China Index Academy, the new home transaction area recorded during the holiday slumped 37.7 percent from that of last year.
“Taking Shanghai as an example, the less-than-expected holiday transactions of new homes may be a result of the earlier demand release in September and many buyers’ travel plans during the holiday,” said Lu Wenxi, a market analyst with Centaline Shanghai.
Although starting off low, the performance this month is pretty expected, especially with policies announced for supporting self-dwelling home buying demand, Lu said.
“The series of favorable policies announced at the end of September together with several Chinese cities’ recent optimization measures have restored market confidence to some extent,” said Chen Wenjing, director of research with the China Index Academy.
Chen said a wait-and-see sentiment among homebuyers still exists, and it will take time for existing policies to take effect.
Market demand will see further recovery as more follow-up measures from local governments are to be announced, and the new home market may possibly see stabilization in the last quarter of this year, she added.