China’s second-hand house market seen rebounding during holidays
Published: Feb 19, 2024 10:48 PM
Cranes are seen at a construction site of a housing complex in Beijing. Photo: VCG

Cranes are seen at a construction site of a housing complex in Beijing. Photo: VCG

China's second-hand house market rebounded during the 2024 Spring Festival holidays, with the nationwide transaction volume surging by 70 percent, data from Beike Research Institute showed.

Market analysts said the result was basically in line with expectations as a series of policy adjustments that commenced before the holidays have taken effect. This lifted bars on certain critical aspects including the down payment ratio and house purchase limit, further stimulating market vitality.

The second-hand house transaction volume across tier-2 cities surged by 98 percent year-on-year, and the volume increased by 65 percent year-on-year among tier-3 cities, read the report. It declined by 3 percent in tier-1 cities.

Suzhou in East China's Jiangsu Province, Zhengzhou in Central China's Henan Province and Xi'an in Northwest China's Shaanxi Province were the top three in terms of second-hand house transaction volume among tier-2 and tier-3 cities.

Beike Research Institute said that aside from the relatively low transaction volume in 2023 due to the pandemic, stronger promotion and policy support has activated consumption potential in tier-2 and tier-3 cities. Another factor is that second-hand house prices have reached an affordable level.

Song Ding, a research fellow from the China Development Institute, told the Global Times on Monday that some tier-2 cities have comprehensive consumption potential and promising industrial growth that can even rival tier-1 cities, but their housing prices are much lower, thus helping the market to rebound.

Among tier-1 cities, the transaction volume in Shenzhen in South China's Guangdong Province doubled during the holidays, while the volume in Beijing slightly declined.

However, a Beijing-based white-collar worker surnamed Yang, who confirmed on a second-hand house before the Spring Festival holidays and is currently processing the transaction, told the Global Times on Monday that properties in tier-1 cities still have stronger resilience against market headwinds.

"I need to address my rigid housing demand, and second-house prices in Beijing have dropped to an affordable level for me. I also believe that the sector will see a rebound after the Spring Festival holidays as a number of policy support measures have helped to boost the market," said Yang.

On February 6, Beijing issued its version of optimized measures by loosening home buying requirements in Tongzhou district. This allows local people and families with no property to buy a home in the district, a move to release consumption potential that is in accordance with local real estate market conditions.

In addition, Guangzhou in South China's Guangdong Province announced a move on January 27 this year to scrap buying restrictions on residential flats of over 120 square meters. Three days later, Shanghai announced it would allow eligible non-local individuals who have paid taxes for five years or more to buy one residential apartment outside the city's downtown area.

"Consumption in the general consumer goods sector and real estate sector during the Spring Festival holidays indicated that the market has been activated," said Song, noting that the general economic situation in the first quarter of 2024 will outperform that of the last quarter of 2023 if there is more policy support.

On the first day after the Spring Festival holidays, the government of Hangzhou, East China's Zhejiang Province, released a document on promoting economic development, including ensuring the healthy development of the local real estate market.

The Tianjin Office of the National Financial Regulatory Administration (NFRA) held a meeting on Monday calling for efforts to implement a real estate financing coordination mechanism. Since the beginning of February 2024, NFRA local offices in another five provinces, municipalities and autonomous regions announced accelerated implementation of the mechanism.