Local govts nudge homebuyers with incentives

As China's property market enters its traditional high season in September and October, local governments are rolling out a series of measures to stimulate home sales and reinforce the sector's stabilizing trajectory, analysts said.

Since late August, cities such as Shanghai, Suzhou in Jiangsu province, and Changchun in Jilin province have unveiled new steps, such as easing purchase restrictions, removing sales restrictions, and offering housing purchase subsidies to boost affordability and stimulate the potential for housing consumption.

Effective from Sept 1 to Sept 30, Changchun has announced that it will provide a one-time housing purchase subsidy of 15,000 yuan ($2,100) per unit for individuals who purchase new commercial residential properties in designated areas through a lump-sum payment.

On Aug 26, Suzhou announced the removal of the two-year sales restriction policy for new commercial residential properties within the urban area. A day ahead of Suzhou, Shanghai lifted purchase restrictions on suburban homes.

"With the real estate market policies becoming more accommodative, the market has largely stabilized," said Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute.

Factors such as policy support, stabilizing home prices, the influx of quality housing supply, and the restoration of market confidence have collectively laid the groundwork for the anticipated sales recovery, Yan said.

Zhang Bo, a researcher with 58.com, said that the real estate market is expected to end its downward trend since June and see a recovery in transaction volume in September.

The search intensity for new and second-hand homes increased by 0.6 percent and 1 percent month-on-month, respectively, in August, showing positive signs, Zhang said.

In August, the sales prices of new commercial residential properties in first-tier cities declined by 0.9 percent year-on-year, narrowing the rate of decline by 0.2 percentage point compared to the previous month, said the National Bureau of Statistics.

Fu Linghui, spokesman for the bureau, said at a news conference in mid-September that despite the volatility in the real estate market, the moderation in the year-on-year decline of housing sales and prices suggests that the market is moving in the direction of stabilization.

"The policy adjustments made by local governments have started to yield positive results, as evidenced by the improvements in market activity. But more work is needed to solidify the real estate market's path toward stabilization," Fu added.

Analysts also cautioned that the rebuilding of confidence among home buyers still requires more time, as the "buy when prices rise, not when they fall" mentality has extended the decision-making cycle for many prospective buyers, leading to persistent caution and a wait-and-see approach in the market.