Homebuyer confidence growing

A visitor takes a photo of a model of commercial residential buildings at a sales office in Taiyuan, Shanxi province, on Sept 23. (WEI LIANG/CHINA NEWS SERVICE)

For Wang Miao and her husband, the National Day holiday last month was spent looking for new apartments in Hangzhou, capital of East China's Zhejiang province, instead of visiting the city's varied scenic attractions.

The couple had worked for two years in Beijing and, unable to afford a home in the capital, decided to relocate to Hangzhou a year ago after getting new job offers.

In fact, they had started to study the local home market even before moving in.

The efforts finally paid off, as they signed a purchase deal for an apartment in the city's downtown area a week after the holiday.

"I feel the home market is more promising in the second half, as housing policies are increasingly favorable to homebuyers. We can pay less down payment, get more loan from the personal housing provident fund, and enjoy a very low mortgage loan rate," the 29-year-old software programmer said.

Market confidence and transactions have been boosted after the central and local governments announced a string of supportive measures to stabilize the property market in recent months. In addition, industry experts suggested more fine-tuning is in the pipeline to promote the stable and healthy development of the nation's real estate market.

In major Chinese cities, some indicators signal a turning point in the home market, such as shrinking residential property inventories, more active land supply and trading, and more visits from potential homebuyers.

Experts believe that China's property market has shown signs of bottoming out after three years of adjustments.

"Since the end of September, we've noticed a significant increase in both visits to new projects and signing of sale contracts, and transactions on pre-owned homes have also gone up," said Minister of Housing and Urban-Rural Development Ni Hong during a State Council Information Office news conference on October 17.

"Regulated by a series of policies, China's real estate market has started bottoming out after three years of adjustment," Ni added.

James Macdonald, head of Savills Research China, welcomed the latest policies.

He said they "not only provide broader support for the real estate sector, but also aim to boost the overall economy".

"These policies are crucial for instilling household confidence in job security and encouraging homebuying decisions," Macdonald said.

According to him, over the past two years, various measures have been introduced to support the residential market, mainly at the margins.

Publicly available information shows that since September, the central government, relevant regulators and local governments have introduced a series of measures to promote the steady and healthy development of the real estate market. These policy adjustments have mainly focused on relaxing home purchase restrictions, lowering down payment ratios, and reducing interest rates.

"These measures aim to ease the qualification requirements and financial burden for homebuyers, thereby stimulating the steady recovery of the residential market," said Shaun Brodie, head of research content on the China market at Cushman &Wakefield, a global real estate services firm.

"This will not only help adjust the market's expectations for the future, but also further stimulate the release of housing demand," Brodie added.

In terms of practical effectiveness, these policies have quickly demonstrated their impact, with both new and secondhand home transactions showing growth. "This phenomenon reflects residents' confidence in purchasing homes is gradually recovering, and it is expected that the positive effects of the new policies will continue to emerge in the near future," he said.

"The unparalleled frequency of supportive policies is in line with the spirit of the Political Bureau of the Communist Party of China Central Committee's meeting on Sept 26, which stressed that efforts will be made to stabilize the property market and reverse its downturn," said Xie Chen, head of research with CBRE China, a commercial real estate services and investment firm.

"The meeting has given the direction for ensuing measures, including financing, debt, land and destocking, though it requires further observation concerning the scale of specific measures," Xie said.

Pang Ming, chief economist for JLL China, said forming a new property development pattern is essential to promote the stable and healthy development of the property market.

This can correct all the bottlenecks in real estate market development by ensuring balanced supply and demand, as well as market stability, Pang said.

"Based on their respective conditions, including social development, population, industrial layout and housing supply and demand, cities will be able to make adjustments on demand for home living and reasonable property financing, scientifically arrange land supply, and better allocate financial resources," he said.

"Therefore, it is possible for the property market to meet varied home living requirements and form a benign circle of the real estate industry, which is key to healthy macroeconomic growth and high-quality economic and social development," Pang said.

"Chinese cities' home prices had been stable in September from a month earlier, though home prices had dropped year-on-year. Our survey indicates market confidence is back and market expectations have improved since late September," said Wang Zhonghua, a statistician with the National Bureau of Statistics' urban division.

According to Wang, the monthly survey conducted in late September by the bureau showed that among the nation's 70 major cities, 58.3 percent of the polled respondents expected new home prices to grow or remain stable in the next six months, up 10 percentage points from August, and 45.4 percent of the respondents said they were positive on pre-owned home prices, up 6.5 percentage points month-on-month.

Brodie said the September data indicates the increased confidence and improved expectations about the real estate market.

"In September, among the 70 large- and medium-sized cities, the house prices generally stabilized on a quarter-on-quarter basis. Due to the release of improvement demand, the month-on-month price growth in Shanghai had been the highest in the country for seven consecutive months," he said.

According to him, with the introduction and implementation of a package of new real estate policies at the end of September, the first half of October saw a marked pickup in activity in both new and secondhand housing markets in core cities, as well as stabilization in house prices, and a significant improvement in key real estate indicators. Prices of new and secondhand homes are expected to remain stable or rise in the coming year.