China's property market sees 'turning point' thanks to new stimulus policies, Shenzhen sees 24% increase in new home sales
In an effort to boost the economy and stabilize the property market, China introduced a comprehensive set of "policy combinations" last month. These measures have sparked a significant rebound in mainland and Hong Kong stock markets while driving property market activity in cities such as Beijing, Shanghai, and various cities across the Greater Bay Area.
In particular, removing property purchase restrictions in the Greater Bay Area has accelerated transactions for new and second-hand properties, yielding promising early results. Industry insiders believe these new policies demonstrate the government's strong determination to stimulate both the economy and the real estate sector, with expectations of significant property market growth in the fourth quarter.
During the National Day holiday, property viewings and inquiries surged in Guangzhou, a city in the Greater Bay Area. A new development in Nansha District, launched in July 2024 and promoted as conveniently located near the Shenzhen-Zhongshan Bridge, saw impressive results. The project offers 700 units within a price range of 1.6 million to 3 million yuan. Before introducing the new policies, only around 60 units had been sold. However, following the removal of purchase restrictions in Guangzhou, with Nansha District easing restrictions even earlier, sales have significantly increased.
Real estate agents have reported a sharp rise in property viewings and inquiries during the National Day period, with a growing number of buyers from other provinces, as well as from Hong Kong and Macau, expressing interest in purchasing properties in Guangzhou. Some agencies even requested their staff to cancel National Day holidays to accommodate the increased demand for property tours.
In Shenzhen, the property market has also benefited from the central government's relaxing property policies. One of the key changes includes reducing the down payment for homeowners looking to upgrade their homes to 20%, which has encouraged many citizens to "buy bigger homes." Local residents have expressed confidence in the government's resolve to support the housing market. Developers in Shenzhen have noted that housing supply is dwindling, prompting buyers to make quicker decisions.
Improved market sentiment has also boosted the second-hand property market. According to agent data, there are currently 65,000 second-hand properties listed for sale in Shenzhen, an increase of over 1,000 units since introducing the new policies, marking a multi-year high for listings. Additionally, the data shows that by the end of last month, daily transaction volumes had increased by nearly 40%, reaching the highest single-day transaction level since February 2021. New home sales also saw a 24% month-on-month increase, hitting a two-year high in monthly sales.
Tony Chan, Vice Chairman and Head of Residential at Centaline Property for the Asia-Pacific region, remarked that the strong stimulus measures have led to a "turning point" in the mainland property market. He expects the recovery in new and second-hand property transactions across the Greater Bay Area to continue. While transaction volumes are expected to rise, property prices will likely remain stable for now. Chan believes that the "turning point" in China's property market will persist.
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