Housing recovery in big cities takes off

The rapid recovery of pre-owned home transactions in the largest Chinese cities is widely attributable to a series of local optimization measures implemented at the end of September, which are expected to boost market confidence and stabilize property sector development nationwide, said industry experts on Wednesday.

Residential property transactions are heating up in the secondary housing market in China's biggest cities including Beijing, Shanghai and Guangdong province's Guangzhou and Shenzhen, partly backed by local governments' decisions to ease controls over home purchase and supportive measures from the central government. As industry experts noted, the positive market sentiment should spread to more urban areas nationwide.

"The encouraging performance in benchmark Chinese cities represents positive feedback to the recent policies both from the central government and local authorities. The recovery in transaction volume will not only stabilize home prices in these cities, but also shore up market confidence and further stabilize the nation's overall housing market," said Lu Wenxi, a market analyst with Centaline Shanghai.

Lu said single-day transaction volumes for existing homes in Shanghai are at high levels, with 1,334 units changing hands on Sunday alone, the highest level since the city began loosening its grip on home purchases in September 2023.

A total of 6,412 units of existing homes changed hands across Shanghai in the week ended Sunday, presenting the highest weekly transaction volume since 2023, said Guan Rongxue, a senior analyst at the Linping Real Estate Data Research Institute.

In Shenzhen, as many as 1,463 units of pre-owned homes were traded during the past week, hitting levels not seen since 2022, Guan said.

"Both Shanghai and Shenzhen announced measures to boost housing demand on Sept 29 with measures to free up restrictions on home purchases and lower down payment ratios for mortgages. Against such a backdrop, the two cities saw eye-catching performances during the National Day holiday, and their respective existing home markets continue to recover with continuously expanding trade volumes," Guan added.

Similar sales volume performance took place in Beijing. Pre-owned home transaction volume in the nation's capital during the week after the extended National Day holiday rose 135.9 percent in comparison with that of the pre-holiday average, the highest weekly number recorded so far this year, and Sunday saw the highest single day transaction volume since January 2021, Shanghai-based news portal ThePaper.cn reported.

Being the first top-tier city to scrap home buying restrictions, Guangzhou has seen its new home transactions surge 2.37-fold to reach 6,687 units during the period between Sept 30 and Oct 12, while 3,771 units were traded in the secondary market, up 23 percent year-on-year, according to data from the Guangzhou Municipal Housing and Urban-Rural Development Bureau.