BEIJING: While China’s housing market has shown tentative recovery signals, a sustained rebound still hinges on continued policy easing, analysts and policy advisers say, with further scope remaining for interest rate reductions and purchase restriction removals.
Their comments came as the sector is closely watching policymakers’ property market policy stances, as improving property market data have reignited debate over whether China’s five-year-long housing market correction is approaching a turning point.
Zhang Yu, managing director and chief real estate analyst at China International Capital Corp, said the recent pickup in home sales in Beijing and Shanghai reflects improving supply-demand dynamics.
“In Beijing and Shanghai, listings in the existing home market have begun to decline while transaction volumes have stabilised, suggesting a shortening absorption cycle – a key indicator of how quickly available housing inventory can be cleared – and offering positive signals of market stabilisation,” Zhang said.
The National Bureau of Statistics said second-hand home prices in China’s first-tier cities – Beijing and Shanghai, as well as Guangzhou and Shenzhen in Guangdong province – climbed 0.4% in March on a monthly basis, reversing a 0.1% decline in February.
In Beijing, second-hand home prices rose 0.6% in March, while Shanghai saw a 0.4% increase.
Home prices and transaction volumes in these two cities are closely followed by market observers as a barometer of the broader property market.
Most of the transactions were concentrated in homes priced below three million yuan, Zhang said, indicating demand remains heavily skewed toward first-time buyers, cautioning that without stronger participation from buyers who need to improve their homes, the recovery could lack sustainability.
Both improvements in macroeconomic conditions and the continuity of property market policy support are essential to stimulate upgrade demand and extend the nascent property market recovery into more cities, he said.
Zhang suggested further easing home purchase restrictions, lowering mortgage rates, facilitating mortgage transfers between buyers and sellers, and offering tax deductions tied to housing consumption.
Zhang also emphasised the need to develop institution-led rental housing and lower thresholds for real estate investment trusts (REITs) to facilitate a meaningful expansion in REIT issuances to support rental housing. — China Daily/ANN
