Editor's note: The National Bureau of Statistics released the latest data on the mainland real estate market today (Sept. 15). From January to August, the sales of new commercial residential properties amounted to RMB 55,015 billion, a decrease of 7.3%. By the end of August, the area of unsold commercial properties was 76.169 million square meters, a reduction of 3.17 million square meters compared to the end of July. Recent intensive adjustments to real estate policies in first-tier cities have drawn market attention.
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. Recent adjustments in the real estate policies in mainland China have attracted market attention. At the beginning of this month, Shenzhen launched new real estate policies, partially easing purchase restrictions. Last month, Beijing and Shanghai also introduced measures to optimize the real estate market. The continuous updates of real estate policies in first-tier cities convey what signals to the market? To discuss this topic, we have invited Lu Wenxi, market analyst at Shanghai Zhongyuan Real Estate, and Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, to provide analysis and interpretation. Hello everyone!
After Shenzhen's new policy on September 5 lifted purchase restrictions in certain areas, interest in school district properties surged. First, I would like to ask Mr. Lu, do you think this "partial relaxation" model will become a reference for other cities?
【Lu】From the overall perspective of purchase restrictions, only first-tier cities have the strictest regulations. Second-tier and lower tiered cities have essentially removed all home purchase restrictions. So, you could say that this model has little reference significance for others.
【Anchor】Okay, what does Mr. Li think? Will other cities that haven't yet lifted purchase restrictions also consider this "partial relaxation" model?
【Li】This round of adjustments in real estate policy features partial relaxation as a common characteristic. The relaxation of purchase restrictions in Beijing, Shanghai, and Shenzhen all follows this logic. The policy was released in Beijing on August 8 and the subsequent purchase restrictions in Shanghai both allow registered resident families and families who have paid social security or individual income tax for a certain number of years to purchase housing in the outskirts without limits. Shenzhen's recent policy also follows this logic, allowing local household and families and non-registered resident families who have paid social security for one year to buy homes in the outskirts without limits.
【Anchor】After Shenzhen announced the new policy, reporters noticed that the viewing volume of small units in well-known school districts in the Luohu District significantly increased. How do you view the long-term value of "school district properties" nationwide? Mr. Lu?
【Lu】Currently, the appeal of school district properties has cooled. However, we need to make some distinctions. In first-tier cities, the core or widely recognized top-tier public schools may still retain some popularity. Otherwise, the demand for lower-tier schools has significantly decreased, as admission thresholds and difficulties are decreasing. Many places are now advocating for a combination of purchasing and renting, and in some regions, certain schools still cannot fill their admission quotas. Therefore, properties near non-top-tier public schools are largely losing their appeal. From this perspective, the long-term value of school district properties will cool down, but core properties in key areas should still maintain some degree of popularity. However, this "popularity" is only relative to second and third-tier schools; compared to the peak period, it has also cooled down somewhat.
【Anchor】Okay, Mr. Li, what do you think?
【Li】For the Luohu District, it is the earliest developed area in Shenzhen, and the housing prices there are relatively low. Early development equipped it with a large number of quality educational resources, with housing prices only about one-third to half of those in Futian and Nanshan. The living atmosphere is also quite vibrant. After the relaxation of purchase restrictions, for young people who have been working hard in Shenzhen for a long time, purchasing lower-priced commercial housing in the Luohu District presents a good opportunity for them to settle in Shenzhen and for their children to attend public schools there.
【Anchor】Yes. From a national perspective, Mr. Lu, do you think the adjustment of real estate policies should focus more on "short-term stimulation" or "long-term stability"?
【Lu】At present, real estate regulation cannot be simply categorized as either short-term stimulation or long-term stability. From the current measures, first-tier cities have basically opened up purchase restrictions wherever possible; only a few currently hot areas have not fully opened yet. Therefore, it has essentially achieved a starting point or intention aimed at long-term stability. Of course, the market is inherently volatile, and short-term confidence and expectations will certainly lead to some trading fluctuations. However, from a long-term perspective, the market should gradually bottom out and then recover.
【Anchor】Okay, Mr. Li, what do you think should be the focus of the adjustment in real estate policies?
【Li】From this round of policies, we believe that the adjustments in July and August, particularly the adjustments since May, have exceeded market expectations and management expectations. There is an urgent need for first-tier cities to take the lead in stabilizing the market. In this round of adjustments, the decline in second-hand house prices in first-tier cities has been more significant. The current regulatory framework should follow a logic that combines both long-term and short-term considerations. Short-term relaxation of purchase restrictions releases home-buying eligibility and lowers thresholds and costs. In the long term, there should be a transition to a new model, primarily enabling new citizens, young people, and the migrant population to become potential homebuyers. This can be approached from the angles of affordable housing initiatives and policies related to purchasing and renting, such as "rent first, buy later."
【Anchor】Good. In fact, Shenzhen is not the first first-tier city to introduce optimized real estate policies. In August, Beijing and Shanghai successively introduced similar policies. Based on the latest policies, what is your prediction for the national real estate market trends in the second half of 2025? For example, will related policies shift from "partial relaxation" to full liberalization, Mr. Lu?
【Lu】Overall, looking ahead to the second half of 2025, including the remaining months, first-tier cities will be driven by policies. There should be a gradual bottoming out and stabilization in terms of both volume and price. Particularly regarding second-hand housing prices, the decline is expected to further narrow. As a result, second-tier cities may also adopt some "copycat" policies from first-tier cities, such as using public housing funds and various banking credit policies, aimed at meeting buyers' needs through various incentives and continuing to boost demand in the market. Following this trend, with the support of first- and second-tier cities, third- and fourth-tier cities also hope to see quantitative improvements and further narrowing price declines.
【Anchor】Okay, Mr. Li, what do you think?
【Li】There is an urgent need for a new round of relief measures for the real estate market. Whether from the current fluctuations in housing prices or the market situation from late Q2 to August, there is a possibility of further declines. Moreover, this decline is accompanied by a weakening of market trading sentiment and increasingly pessimistic expectations. This situation deserves attention. Behind it, there is large-scale supply of new products leading to homogeneous competition, impacting the old products and second-hand housing market, as well as expectations regarding the economic fundamentals causing a rapid increase in second-hand housing listings. There is even a sentiment of quickly selling at reduced prices to clear inventory, which all needs to be recognized. Aside from the adjustments in purchase restrictions in Beijing, Shanghai, and Shenzhen, many cities are actively trying to relieve market pressures, including new policies on public housing funds, which mainly allow the simultaneous use of public housing loans and withdrawals. Policies aimed at increasing loan amounts for multi-child families and those purchasing green buildings, as well as various housing exhibitions and promotions encouraging trade-ins, all indicate that the real estate market has entered a comprehensive stimulus phase.
【Anchor】Looking ahead, is there a chance for the mainland real estate market to see a turning point, and what key factors should we pay attention to, Mr. Lu?
【Lu】In the remaining months, it should be a gradual process of stopping the decline or narrowing the extent of the drop. In my personal judgment, the actual turning point for the market to shift from decline to growth may be in the first half of next year. From the overall market perspective, people should pay more attention to leading indicators, including market expectations in first- and second-tier cities, such as property viewings and visitor numbers. If these leading indicators improve, there will be more opportunities for subsequent transaction volumes. Of course, the most important point is that the current logic of home buying may differ from before. It's not that market demand has disappeared; in fact, it does exist and can be tapped into. However, It is more crucial to identify how to effectively activate current market expectations and confidence. This also requires improvements in the surrounding environment and economic data to boost consumer confidence. Only then can the market create a result of mutual resonance, leading to a rapid or clearer signal of improvement in the real estate market.
【Anchor】Yes. Mr. Li, what factors do you think are worth paying attention to?
【Li】Looking at the data, the further weakening trend may be somewhat suppressed. We anticipate that the upcoming "golden September and silver October" will stabilize the market volume based on the levels seen in July and August, with the decline in prices easing. The main reason is the policy relief mentioned earlier. Additionally, trading activity in September and October is expected to be more vigorous. Thirdly, in September and October, developers will launch some quality products, and promotional efforts will be more apparent. These are the three reasons we highlight. The indicators we observe for whether the market can stop declining and stabilize include, on one hand, the absorption cycle of new homes across various cities and sectors. Secondly, we look at the number of second-hand housing listings and listing prices. Thirdly, we consider whether the number of visitors and reservations for new projects has increased compared to before; these are all leading indicators.
【Anchor】Okay, thank you to both guests. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
Anchor: Laura Cheung | Edited: Kelly Yang, Laura Cheung, Rachel Liu | Translate: Kato Ip | Proofread: Chris Liu
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