China’s Home Sales Jump During Holiday as 130 Cities Offer Perks
(Bloomberg) -- China’s latest steps to revive the housing market have had an immediate impact, judging from reports of brisk sales and buyer interest during the nation’s week-long holiday. Whether the rebound will be sustained is another matter.
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In cities with residential projects running promotions, visits by prospective homebuyers climbed at least 50% from a year earlier, CCTV news reported, citing the Ministry of Housing and Urban-Rural Development. About 130 cities across 20 provinces have rolled out various perks to entice buyers.
Beijing city saw expressions of intent to buy new homes double in the first three days of October, the state broadcaster said. In Shenzhen, sales of new homes jumped more than 10 times in the first six days of the month, while used-home transactions more than tripled, Cailian reported, citing Shenzhen Centaline Property figures. Real estate agents in Shanghai rolled out a “no closing hour” policy after visitors increased, while some buyers in Shenzhen even paid deposits for apartments without viewing them in person, according to the Securities Times.
“It seems like the number of visitors to showrooms and transactions in first-tier cities has risen,” Citic Securities Co. analysts including Chen Cong wrote in a report Monday. “Price declines in these cities have a chance of stopping this year.”
Days before the National Day celebrations, authorities announced a series of policies to stabilize the real estate sector, including by lowering existing mortgage rates and minimum downpayment requirements for second-home purchases. At the local level, Beijing and Shanghai were among cities that widened eligibility to purchase properties.
Chinese developer shares have soared since the moves were announced, and those traded in Hong Kong continued to rally while the mainland exchanges were closed. A Bloomberg Intelligence gauge of Chinese real estate stocks has more than doubled since the stimulus was announced on Sept. 24. Mainland trading is set to resume Tuesday.
Despite the property easing, some experts have warned that more is needed to cement a rebound, including a greater focus on rebalancing the economy toward domestic consumption.
“A solid recovery in the real economy, reflected in improving job and income outlooks, holds the key to a turnaround of confidence in housing,” Bloomberg Intelligence analyst Kristy Hung wrote in a report. Persistent concerns about unfinished homes could lead buyers to prefer secondhand properties over new ones, she said.
While property sales “may have improved” in early October, broader economic data is expected to suggest weak momentum, according to UBS Group AG economists Tao Wang and Ning Zhang. Authorities may announce a fiscal package after the holiday or around Oct. 18, when third-quarter figures are released, they wrote on Monday. China’s top economic planner is scheduled to hold a news briefing on Tuesday.
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The latest stimulus measures will give a marginal boost to the housing market in the fourth quarter, according to analysts at China Index Academy. They expect annual sales of homes by area to fall between 15% and 18% this year.
“The measures must hit the ground running in the early period of the fourth quarter,” the China Index analysts said. “Only then can these measures actually, in a stable manner, support the market into next year.”
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