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Stimulus key to realty stability

As active signs emerge, experts call for more policy support

By WANG YING in Shanghai | China Daily | Updated: 2024-05-17 09:38
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Potential homebuyers ask queries on housing projects at a real estate agency in Beijing in March. [JIANG QIMING/CHINA NEWS SERVICE]

The latest optimization measures adopted by China's major cities to absorb housing inventory have borne fruit, with buoyant market activity being witnessed, based on which experts said that they expect more policy fine-tuning to be unveiled to unleash even more potential demand, stabilize market expectations and promote real estate market stabilization.

The optimized property policies are being introduced in cities including Beijing, Shanghai, Tianjin, Shenzhen in Guangdong province, Hangzhou in Zhejiang province, Xi'an in Shaanxi province, Chengdu in Sichuan province and Nanjing in Jiangsu province. The moves are in response to the tone-setting conference held by the Political Bureau of the Communist Party of China Central Committee late last month, which called for measures to digest housing inventories and optimize new supplies, experts said.

Active signs have appeared following the measures introduced by cities across China, as data revealed by real estate organizations showed.

New home transactions in 15 major cities reached 14,685 units during the week between May 6 and Sunday, soaring 74.24 percent week-on-week, though registering a dip of 2.51 percent from a year ago, said the Zhuge Real Estate Data Research Center.

"Overall, the new home sector is still awaiting further recovery," said Guan Rongxue, a senior analyst at Zhuge.

Performance of the pre-owned home market is more encouraging. Trade volume in the 10 major cities surged 184.9 percent from a week ago to reach 19,379 units, up 85.73 percent year-on-year.

"With the wrapping up of the May Day holiday, the pre-owned housing market showed rapid resumption, and we believe the measures announced ahead of the holiday contributed to the demand recovery," said Guan.

On April 30, immediately after the CPC Central Committee Political Bureau meeting, Beijing announced that qualified households or single adults living in Beijing were now eligible to buy an additional apartment outside the Fifth Ring Road.

On May 3, an initiative related to trade-ins of commercial housing units was launched in Shanghai.

There was a peak of sorts on May 9 when Hangzhou announced a scrapping of all restrictions on homebuying. Later that afternoon, Xi'an also lifted all its homebuying requirements. The new policies are intended to cushion the Northwest Chinese city's pressure in destocking its housing inventory, said Zhang Hongwei, founder of Jingjian Consulting.

"We expect a wave of policy easing in May with regards to property measures," said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.

"The recent measures announced by local governments have approached their limits, and these innovative measures will hopefully inspire more creative and targeted policy adjustments," said Yan.

"The existing policies will work together to help destock residential properties, greatly boost market sentiment and spur transactions. In general, the upward trend of the real estate sector is likely to take place in a better, steadier and more rapid manner," Yan said.

Concerning property supply and demand, the CPC Central Committee Political Bureau meeting said Chinese people's expectations for high-quality housing, measures to digest property inventory and optimization of new demand should be handled in a coordinated manner.

"Close attention should be paid to building a new real estate development model and promoting the high-quality development of the property industry," it was stated at the meeting.

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