In the face of ongoing challenges, China’s property sector is showing clear signs of recovery, driven by a mix of strategic policy interventions designed to stabilize the market and restore consumer confidence.
A key milestone in this recovery occurred in late September, when the Communist Party’s Political Bureau convened a meeting to address the struggling property market. The meeting underscored the need for policies aimed at reversing the market downturn, including relaxing housing purchase restrictions, reducing mortgage interest rates, and enhancing fiscal, tax, land, and financial policies.
Responding swiftly to these directives, authorities have implemented a series of measures aimed at reducing home-buying costs, easing mortgage burdens, and offering vital support to first-time homebuyers and those seeking to upgrade their properties.
One of the most significant moves was the central bank’s decision on September 29 to lower interest rates on existing housing loans, including those for first and second homes. The reduction, which came into effect by October 31, was set at a minimum of 30 basis points below the Loan Prime Rate, a key market-based lending benchmark, helping to alleviate the financial strain on property owners.
This action was followed by a wave of local policy adjustments in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen. These cities introduced a variety of measures aimed at rejuvenating their respective property markets.
These recent steps build upon landmark reforms announced in May, which included reducing minimum down payment requirements, establishing a relending facility for affordable housing, and committing to the completion of unfinished homes. Together, these initiatives are beginning to show positive results.
According to the National Bureau of Statistics, the decline in commercial residential property prices in the country’s 70 largest and medium-sized cities slowed significantly in November, compared to the same period last year. Furthermore, home transactions turned positive in October, with new home sales marking a 0.9% year-on-year increase, halting a 15-month streak of decline. Combined transactions of both new and second-hand homes also grew by 3.9%, marking the first increase in eight months.
Market experts point to these changes as evidence of a shift in sentiment. Lu Wenxi, a market analyst with real estate agency Centaline Property, notes that the recent policy changes have sparked optimism, particularly with a notable uptick in second-home transactions in major cities like Shanghai.
The rebound in the real estate market is also evident at the grassroots level. Real estate offices in Beijing’s Chaoyang district have reported some of the busiest months of the year, with agents conducting multiple viewings in a single day, reflecting the growing demand.
However, while the recovery shows promise, long-term stability will depend on sustaining this momentum and rebuilding confidence in the market. Ensuring the timely delivery of housing projects remains crucial to maintaining market optimism.
The “white list” mechanism, launched earlier this year, has been instrumental in providing targeted financial support to eligible real estate projects. As of October, loans for “white list” projects had surpassed 3 trillion yuan ($411 billion), with projections to reach 4 trillion yuan by year-end.
Gao Yuan, director of the Beijing Lianjia Research Institute, believes that this rebound could be the strongest in two years, driven largely by a restored sense of confidence. He predicts that this momentum will be sustained as both buyers and sellers return to the market, leading to a more stable recovery.
The government’s focus on stabilizing the property market is also part of its broader strategy to stabilize the economy. At the recent Central Economic Work Conference, the country emphasized the importance of “stabilizing expectations” as a critical objective for 2025.
Market sentiment is gradually improving, as evidenced by rising business activity and expectations within the property sector. The Property Purchasing Managers’ Index rose by 2.5 percentage points month-on-month in October, while the Business Expectation Index climbed by 1.8 percentage points.
Fu Linghui, spokesperson for the National Bureau of Statistics, noted on December 16 that improved market expectations were helping sustain the recovery, with the property sector showing clear signs of stabilization after three years of adjustment.
Looking ahead, China’s housing policies are shifting focus toward improving the quality and sustainability of housing. The goal is no longer merely to provide homes but to offer better homes, ensuring a resilient property market that can weather future challenges.
Urban renewal projects are central to this shift, revitalizing older neighborhoods and enhancing living conditions for millions. In 2023, more than 66,000 such projects were undertaken, with another 54,000 planned for 2024, breathing new life into aging residential areas.
A report by China Minsheng Bank highlights that restoring market confidence remains the key to stabilizing the property sector. Looking to 2025, experts emphasize the importance of continued efforts to bolster confidence, guide expectations, and ensure the effective implementation of both current and future policies.
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