BEIJING/SHENZHEN: Shenzhen real estate agent Feng Kunzhu, 34, barely had time to eat at the start of China’s Golden Week holidays from Oct 1, a day after the Chinese government eased home-buying curbs in its latest bid to rescue the country’s ailing property market.
Potential home buyers, including those from out of town who are now free to purchase a wider range of properties in parts of Shenzhen, have thronged show-flats across the southern Chinese city.
Feng, who works with real estate agency Beike, called this surge in business “rain after a long drought”. He had one client who put in an offer after just half an hour of viewing a property, he said.
“There were more clients than I could bring around,” he told The Straits Times on Oct 5, near a cluster of new property developments by the Shenzhen North railway station. “It’s been tiring, but I am happy to be tired.”
In at least 25 Chinese cities, homes are being sold in numbers not seen since the housing market came crashing down in 2021, after a regulatory crackdown on high leverage among property developers triggered a liquidity crisis, leaving a trail of uncompleted homes after some developers defaulted on their debts.
Based on data from the Beijing-based real estate research institute China Index Academy, released on Oct 8, the number of new homes sold in the first seven days of October jumped 27 per cent over the same period in 2023.
New home sales in the first week of October in Beijing and Shanghai exceeded that for the whole of September, while Guangzhou and Shenzhen’s sales doubled the previous month’s, the institute’s data showed.
While some developers are signalling their optimism by cancelling discounts or raising prices after the Golden Week surge of interest, analysts doubt this buzz can be sustained past the holidays, which ended on Oct 7.
Gary Ng, a Hong Kong-based senior economist at investment bank Natixis, said such episodes of increased home sales after policy relaxations have occurred in the past, so it is unclear how long the surge may last.
“At this stage, households will feel more changes in sentiment, but it depends on implementation in the next few months, such as whether interest rates will fall further and quickly,” he said.
Yan Yuejin, vice-president of the E-house China R&D Institute in Shanghai, said price increases while the market is hot can be viewed as a strategy to draw buyers who are sitting on the fence.
“The percentage of price increase is kept within a controlled range of 2 per cent because developers know they can’t increase the prices too much, as there is still an oversupply of unsold homes now,” he said.
On the evening of Sept 30, the four tier-1 cities – Beijing, Shanghai, Guangzhou and Shenzhen – announced home easing measures and lower down payment requirements before the Golden Week holiday. Other cities followed suit.
Over the Oct 5 and 6 weekend during the holiday, some show-flats in Beijing and Shenzhen received a stream of prospective buyers when The Straits Times visited.
At the crowded showroom of Central City in north Shenzhen, Zhang Jie, a Zhuhai resident in her 50s who had been thinking about buying a flat for her son, decided to take the plunge.
When asked why she did so, she said: “Now the property market is picking up. My son works here and needs a flat.”
By the entrance of the salesroom was a display of large gold-coloured eggs, which buyers smash with a hammer upon closing a deal, as staff pop confetti sticks. These eggs were smashed five times in the 1½ hours ST was there.
In the Royal Mansion property showroom on the western side of Beijing, busy agents brushed aside this reporter.
“If you’re not buying a home today, you can come back after the Golden Week holiday when there’ll be fewer people, and we may have time to talk to you,” one of them said.
Yu Gang, 28, a sales manager at Oriental Courtyard, a luxury property development in the eastern side of Beijing, said that although he and 31 other sales staff started work at 9am, they had no fixed closing time for the showroom and would close only after the last buyer leaves.
He said that about 300 buyers have put up expressions of intent to buy homes in the 606-unit development as at Oct 5, where the average 165sq m four-bedroom unit is going for around 20 million yuan (S$3.7 million).
Official data showed that about 130 cities across 20 provinces rolled out promotions during the holiday. Visits by prospective buyers were up by at least 50 per cent from a year earlier.
To salvage China’s property sector, which has been marked by declining home prices and plummeting home sales since 2021, Beijing has been pledging more support. On Sept 26, China’s Politburo, a top leadership body, issued a clear directive for officials to “stop the decline” in the housing market.
On Oct 8, China’s top economic planning body – the National Development and Reform Commission – pledged to further promote the stabilisation of the property market with measures such as providing more loan support for “white-listed” projects deemed eligible for financial assistance.
Throughout the Golden Week holiday, local media reported on the warming up of market confidence in the property sector, while Chinese social media buzzed with videos and photos of packed showrooms.
Zhang Xiaoduan, deputy dean of the Cushman & Wakefield Research Institute in Shenzhen, said it was unsurprising the market responded well to the recent policies as the government’s measures were significant.
But she noted that the buying frenzy does not yet mean the real estate sector is on the rebound.
She said the current wave of buyers comprises those who needed to buy a property but had adopted a wait-and-see attitude. With this segment now at least partially exhausted, she said, it remains to be seen if sales momentum can be sustained. - The Straits Times/ANN