Sentiment upbeat on property market measures

Homebuyers in Shanghai and surrounding areas have given a positive reaction over the weekend to the supportive measures unveiled on Friday to stabilize the nation's property market, market insiders said.

"We were super busy on Saturday and Sunday. Our workload grew 30 to 40 percent from the previous weekend due to surging inquiries and visits from potential clients, and many of us kept communicating with customers until midnight," said Gui Chenjie, an agent with Sinyi Realty in Shanghai's Hongkou district.

Gui said that on Sunday alone, the real estate agency outlet he works for inked two purchase deals after clients visited apartments.

"These flurries do not happen often. According to our experience, it usually takes a week for homebuyers to make the decision after seeing residential properties on the spot," he said.

In comparison with the previous weekend, 32.9 percent more units of pre-owned homes were traded on Saturday and Sunday, while visits made to such homes rose 20 percent from the weekends in April, said Shanghai Lianjia Research Institute.

"In the 10 major cities tracked by our center, Shanghai and its neighbor city Hangzhou in Zhejiang province are the only two which saw a week-on-week rise in pre-owned home transactions," said Guan Rongxue, a senior analyst at Zhuge Real Estate Data Research Center.

During the week of May 13 to Sunday, 4,597 units of pre-owned homes were traded in Shanghai, surging 25.05 percent from a week earlier, while that of Hangzhou saw a mild rise of 2.21 percent, Guan said.

Guan said combined transactions of secondhand homes in the 10 cities reported a week-on-week drop of 11.23 percent, and declined 7.46 percent from last year.

In the new home market, Shanghai saw its transactions maintain an uptrend by rising more than 20 percent week-on-week in the week of May 13 to Sunday, the research center said.

"The measures unveiled on Friday, such as cutting payment and mortgage interest rates and turning housing inventories into government subsidized homes have a clear aim of boosting the housing market. The recovering homebuying activities are the active response to such measures," said Lu Wenxi, a market analyst with developer Centaline Shanghai.

Lu said that despite the announcement of Shanghai on Saturday lowering interest rates for the housing provident fund starting on Jan 1, 2025, the rest of the measures are yet to be implemented at the local level.

"It is expected that local governments will roll out their respective measures fitting their own conditions, but it may take time for the market to digest the policies and see the confidence recover," Lu said.

Successively introduced on Friday, these supportive measures are in line with the nation's goals of accelerating its pace of building a new real estate development mode and promoting the high-quality development of the property industry, said officials and industry experts.

During a teleconference on property policies in Beijing on Friday, Vice-Premier He Lifeng urged local governments with more housing inventories than others to purchase some of the stocks for government-subsidized housing, said Xinhua News Agency.

Also on Friday, the country removed commercial mortgage rate minimums for first and second homes nationwide, and lowered minimum down-payment ratios for first and second homes, respectively, to 15 percent and 25 percent, according to a joint notice issued by the People's Bank of China — the country's central bank — and the National Financial Regulatory Administration.

In another spate of announcements, the central bank said it would further lower mortgage interest rates, as well as that of the housing provident fund.

The high frequency of property sector measures released by Chinese regulators will shore up the property market by offering homebuyers more favorable conditions, like lowering requirements and cutting costs for home purchases, and it is expected that both rigid demand and needs to improve housing conditions will be better satisfied, said Ma Hong, a senior researcher with the GDD (Guangzhou Development District) Chief Industry Research Institute.