Chinese first-tier cities see stabilization of property prices in September: official data
Published: Oct 19, 2023 04:11 PM
Beijing real estate Photo:VCG

Beijing real estate Photo:VCG

Chinese first-tier megacities led a wave of home price recovery in September, a traditional peak season for property transaction, as a raft of supportive measures from the government was being implemented.

New home prices of China's four first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen, stayed flat month-on-month in September, reversing a month-on-month decline of 0.2 percent in August, data from the National Bureau of Statistics (NBS) showed on Thursday.

Prices of second-hand homes in those cities also recorded an increase on month-on-month terms of 0.2 percent, ending negative growth during the last four consecutive months.

On a yearly basis, prices of new houses in the four cities inched up by 0.7 percent in September, expanding 0.1 percentage points from the previous month. Home prices in Beijing and Shanghai rose by 2.9 percent and 4.4 percent, while Guangzhou and Shenzhen decreased by 1.7 percent and 3.0 percent year-on-year, respectively, according to the NBS data.

Second-hand home prices in those cities fell by 1.4 percent from a year ago, a decline that narrowed by 0.2 percentage points from the previous month.

Notably, Beijing and Shanghai have led the price rebound in new homes and second-hand ones compared with the other two large cities in Guangdong Provincer. 

"First-tier cities took the lead in price rebound, fully demonstrating that supportive policy effects are being actively released," Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, said in a note sent to the Global Times on Thursday.

Since late August, China unveiled a raft of measures to promote the sound development of the property sector. 

The Ministry of Housing and Urban-Rural Development announced in August that it is in favor of the re-adjustment of mortgage policies, leaving it to city-level governments to decide if families that own no property in the region are to be treated as first-home buyers eligible for favorable mortgage rates. The move allowed more home-buyers to access preferential down payments and interest rates for applying first-home loans.

Meanwhile, existing mortgage rates of first-home purchases were also lowered starting late September, enabling tens of millions of borrowers in China to enjoy the benefit. The payment they in their pockets could later translate into consumption and investment funds in the future, experts said.

Compared with the rebound of home prices in first-tier cities, China's second-tier and third-tier cities have shown lackluster property performance in September.

From a month-on-month perspective, the sales price of new homes in second-tier cities fell by 0.3 percent, expanding 0.1 percentage points from the previous month, while second-hand housing prices dropped by 0.5 percent, staying flat compared with that of August, according to the NBS data.

Price differentiation will be a general trend. With the further easing of policies, it may be normal for properties in a few more large cities to stabilize Yan said.

Boosting confidence, preventing risks and promoting property sector transformation could be future policy directions, said Zhang Dawei, chief analyst with the real estate agency Centaline Property.

Current supportive measures have played their role in lifting market confidence and improved property transaction especially for families that have inelastic demand for homes. But without rollout of follow-up measures, property sales could continue its downward trend in October, according to Zhang.

Global Times