Policy seen as market stabilizers amid continuously improved performance

A new wave of stimulus policies launched in the past week by key Chinese cities including Shenzhen and Guangzhou, in Guangdong province; Tianjin; and Wuhan, Hubei province is expected to lower homebuying costs and boost market confidence, paving the way for the housing market to stabilize in the coming months, experts said.

These measures came after the Political Bureau of the Communist Party of China Central Committee's meeting held on April 28, and will serve as market stabilizers amid continuously improved performance, said industry experts.

"The meeting proposed to stabilize the real estate market and upgrade real estate regulation policies in a steady and progressive manner, setting the tone for the latest array of housing policy adjustments in the past few days," said Zhang Bo, head of the Beijing-based 58 Anjuke Research Institute.

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"The policy updates have effectively boosted market confidence and provided solid support for a pickup in transactions during the May Day holiday. It is also worth noting that the measures introduced by local governments are likely to encourage upgraded housing to enter the market," Zhang said.

Shortly after the key meeting analyzing the current economic situation and related work, Shenzhen announced on April 29 that it will ease home purchase restrictions and raise the housing provident fund loan limit.

The move was followed by Guangzhou, Tianjin and Wuhan, which rolled out their own measures on April 30.

In Guangzhou, for example, more subsidies were offered for home purchases under the city's trade-in program. In Tianjin, previous homebuying restrictions were scrapped and purchasing costs were lowered in a bid to stimulate housing demand.

Likewise, Suzhou, Jiangsu province followed suit on Saturday by introducing measures covering 11 areas, including the development of high-quality housing.

Li Yujia, a researcher on residential property policy in Guangdong, expects the new measures to work alongside existing supportive moves to help achieve initial market stabilization in the first half.

"Although the May Day holiday is not a conventional period for home trading, the active home transactions in the past two months may help trading in May to maintain the upward trend," Li said.

The wave of policy announcements by major Chinese cities to fine-tune their housing measures is in line with current conditions in the property market, said Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute.

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"Given the leading role of first-tier and key second-tier cities in stabilizing the national property market, their measures will provide valuable references for policy optimization in other cities across the country," Yan said.

Meng Xinzeng, senior analyst with the China Index Academy, said improved demand and market expectations translated into stronger home transactions in major Chinese cities in April, extending the early spring market recovery.

"Such a trend is particularly evident in top-tier Chinese cities," Meng said.

He added that in terms of gross floor area, new home sales in Beijing and Shanghai rose 59 percent and 10 percent year-on-year, respectively, in April. In the pre-owned housing market, Beijing also saw a similar trend, posting its highest monthly existing home sales in nearly five years.

Contact the writers at wang_ying@chinadaily.com.cn