China home sales jump during week-long holiday as 130 cities offer perks

Hong Kong – China’s latest steps to revive the housing market have had an immediate impact, judging from reports of brisk sales and buyer interest during the nation’s week-long holiday. 

Whether the rebound will be sustained is another matter. 

In cities with residential projects running promotions, visits by prospective buyers climbed at least 50 per cent from a year earlier, CCTV news reported, citing the Ministry of Housing and Urban-Rural Development. About 130 cities across 20 provinces have rolled out perks. 

Beijing city saw expressions of intent to buy new homes double in the first three days of October, the state broadcaster said.

In Shenzhen, sales of new homes jumped more than 10 times in the first six days of the month, while used-home transactions more than tripled, Cailian reported, citing Shenzhen Centaline Property figures.

Real estate agents in Shanghai rolled out a “no closing hour” policy after visitors increased.

Some buyers in Shenzhen even paid deposits for apartments without viewing them in person, according to Securities Times.

“It seems like the number of visitors to showrooms and transactions in first-tier cities has risen,” Citic Securities analysts wrote in a report on Oct 7. “Price declines in these cities have a chance of stopping this year.”

Days before the national day celebrations, the authorities announced policies to stabilise the real estate sector, including by lowering mortgage rates and minimum down payments for second-home purchases.

At the local level, Beijing and Shanghai are among cities that widened eligibility to purchase properties. 

Still, Chinese developer shares pared gains on Oct 8 as mainland trading resumed after the holiday.

The Shanghai Property Index initially climbed as much as 9.8 per cent before closing 2.3 per cent higher after China’s top economic planner refrained from unveiling fresh property measures at a news briefing. 

At the National Development and Reform Commission (NDRC) briefing, where investors were anticipating fiscal stimulus, the authorities reiterated longstanding goals.

The government will focus on accelerating the absorption of housing inventory, increasing the quality of homes and revitalising existing land, among other targets, said NDRC chairman Zheng Shanjie.

Some experts have warned that more is needed to cement a rebound, including a greater focus on rebalancing the economy towards domestic consumption.

“A solid recovery in the real economy, reflected in improving job and income outlooks, holds the key to a turnaround of confidence in housing,” Bloomberg Intelligence analyst Kristy Hung wrote in a report. Persistent concerns about unfinished homes could lead buyers to prefer second-hand properties to new ones, she said.

While property sales “may have improved” in early October, broader economic data is expected to suggest weak momentum, according to UBS Group economists Tao Wang and Ning Zhang.

The authorities may announce a fiscal package after the holiday or around Oct 18, when third-quarter figures are released, they wrote on Oct 7. 

The latest stimulus measures will give a marginal boost to the housing market in the fourth quarter, according to analysts at China Index Academy.

They expect annual sales of homes by area to fall between 15 per cent and 18 per cent in 2024. 

“The measures must hit the ground running in the early period of the fourth quarter,” the analysts said. “Only then can these measures actually, in a stable manner, support the market into next year.” BLOOMBERG