Homebuyers look at newly constructed residential property in Beijing. (PHOTO PROVIDED TO CHINA DAILY)
As spring arrives, the nation’s housing market is expected to welcome a warm-up driven by greater demand and policy fine-tunes.
Since the beginning of the year, policies have been announced at both central and local government levels, which many industry experts believe will help stabilize the property market and prompt more reasoned home buying demand in the coming months.
Xu Kai and his wife were among the early birds, having recently bought a new four-bedroom apartment in Hangzhou, Zhejiang province.
New home construction may rebound in the third quarter, and growth of the whole year’s real estate investment may rise at a slower pace of 3.5 percent, while sales will see an obvious recovery in the fourth quarter after gradually stabilizing in the third.
Lian Ping, chief economist and head of the Zhixin Investment Research Institute
The 31-year-old works for a leading internet company in the city, and the couple believes that the new home is a must-have gift to welcome their baby girl, who was born in March.
They said the apartment will not only provide their daughter with a good living environment, but also allow her to receive high-quality education in a good school district.
In Southwest China’s Chongqing, Du Liu has started planning for life after marriage by purchasing a three-bedroom property amid his upcoming wedding. It took four months to find the ideal home in a good environment and with a good school district, according to the 23-year-old, who works in the marketing division of a popular consumer goods company.
Experts said the issuance of more policies aimed at encouraging demand means spring is likely just around the corner for the property market.
As of April 20, more than 85 cities had eased their home buying regulations, with measures ranging from looser purchasing restrictions, loan limitations and sales curbs to lowering the down payment proportion, cutting home loan interest rates, providing support via provident fund loans, and others, according to calculations by the Zhuge Real Estate Data Research Center.
“On the one hand, these policies have unleashed rational home demand, while on the other they have boosted home buyers’ confidence in the market outlook, which will help increase transactions in the coming months,” said Wang Xiaoqiang, chief analyst with the research center.
She added that as the measures gradually take effect, the market will heat up step-by-step.
The relaxed regulations are set to stabilize economic growth, ease the burden on real estate companies and improve local economies.
According to statistics from Centaline Property, more second-tier cities have eased curbs on the housing market, including Zhengzhou, capital of Central China’s Henan province, Fuzhou in East China’s Fujian province, Harbin in the northeastern province of Heilongjiang, and Lanzhou in Northwest China’s Gansu province.
A sales representative introduces a property project to customers in Yantai, Shandong province. (TANG KE / FOR CHINA DAILY)
In April, a handful of “hot spot” cities announced measures to encourage home buying activities. Suzhou, in East China’s Jiangsu province, eased its restrictions on both sales and purchases on April 11. One day later, purchasing restrictions were eased in the Lishui and Liuhe districts of Nanjing, capital of Jiangsu province, as nonlocals were allowed to buy their first homes without proof of social security status.
On April 13, Huaibei, in Anhui province, announced that first-time home buyers or families can receive a maximum subsidy of 60,000 yuan ($9,350) during the city’s Spring Home Exhibition, which concludes on May 4,
according to guandian, an online industry observer.
Policies aimed at encouraging rigid and rational demand reached their peak on April 12 as Shanghai’s Lingang Special Area of China (Shanghai) Pilot Free Trade Zone shortened its residential requirement for nonlocal talent to buy homes from at least one year to a minimum of three months.
In addition to Lingang, some other noncentral areas of Shanghai and other cities are expected to roll out similar measures as long as their home market faces challenges, said Yan Yuejin, director of the E-house China Research and Development Institution in Shanghai.
The 2022 Government Work Report said that along with measures introduced in line with local conditions, the central government has pledged to meet people’s needs by better satisfying their rational living demands, stabilizing land prices, home prices and market expectations, applying policies by taking the special conditions of each city into consideration, and thereby promote the healthy development of the property market and build a virtuous circle.
The nation’s top regulators have also taken a supportive stance to stabilize the property sector in recent months, which has greatly boosted market confidence and strengthened expectations, experts said.
It is expected that in the first few months of this year the property market will continue last year’s low market trend before gradually rising in the latter half thanks to the macroeconomic measures and demand recovery, said Lian Ping, chief economist and head of the Zhixin Investment Research Institute, citing the institute’s research report on the real estate market.
“New home construction may rebound in the third quarter, and growth of the whole year’s real estate investment may rise at a slower pace of 3.5 percent, while sales will see an obvious recovery in the fourth quarter after gradually stabilizing in the third,” Lian said.
A man cycles past a construction site in Hai’an, Jiangsu province. (XU JINBAI / FOR CHINA DAILY)
Tang Hua, senior director and head of residential sales at Savills China, said cities maintained rapid growth by attracting more talent and retaining the value of houses in first- and second-tier cities.
Combined with the eased regulations, first-tier cities and strong second-tier cities are likely to take the lead in stabilizing the market, making it a good time for buyers to enter the market.
For most third- and fourth-tier cities, the continuous population outflow and lack of high-end industries will make rule relaxation a chance to ease the pressure on sales and consumption.
Hui Jianqiang, head of research at the Beijing Zhongfang-Yanxie Technology Service, said fine-tuned policies for the property market should guard against violent market swings, either too-rapid rises or too-sharp falls, as these factors would drive up demand in more than 40 related subindustries.
“The connection of these sectors may not be as close as before, but the pulling effect is still there as long as the nation’s urbanization continues,” Hui said.
The overall recovery of the real estate industry chain can effectively support economic growth.
At present, the smooth operation of the real estate industry is an important cornerstone for ensuring stable macroeconomic development.
COVID-19 outbreaks in many regions have affected the downstream infrastructure and property construction, and even consumption, leading to a slowdown in domestic demand.
However, the continuous relaxation of relevant monetary policies may head the market in a positive direction. As a result, demand for domestic property is expected to rebound and spur economic recovery, Tang said.
According to Cheng Chong, an analyst with the big data research institute of Shenzhen Fangdd Network Technology, an online property trading service platform, Ning Jizhe, deputy head of the National Development and Reform Commission, said last year that property is a pillar industry, and residential properties are being bought for people to live in and not as investments.
Research by Ren Zeping, an online influencer and former chief economist of property giant Evergrande, showed that in 2020, the real estate sector and its related industry chain accounted for 17 percent of national GDP, while 27.3 percent of fixed-asset investment came from investment in real estate development.
Cheng said that as an important part of the economy, the property market’s stable development is essential and necessary for healthy economic activity.
Xu Shuwei contributed to this story.