BEIJING: The traditional spring home-buying season, which typically peaks in March and April, stretched into May this year as policy support and targeted demand in first-tier cities drove a notable pickup in sales, helping to restore market expectations, experts say.
Data from the China Index Academy show that total new home sales of the country’s top 100 real estate firms reached 1.23 trillion yuan in the first five months, with the year-on-year (y-o-y) decline narrowing for the third consecutive month.
In May alone, sales by those developers stood at 328.78 billion yuan, up 17.6% from April, according to the academy.
China’s new home sales steadied in May, driven by a pickup in larger cities, even as the national market remained largely flat, market watchers said.
The 50 major cities tracked by real estate information provider CRIC recorded 13.62 million sq m of new home transactions in May, up 2% from April and just 2% lower than a year earlier.
The resilience came largely from larger cities. Combined transactions in Beijing and Shanghai, as well as Guangzhou and Shenzhen in Guangdong province, totalled 2.15 million sq m in May, an 11% month-on-month (m-o-m) increase and a 6% y-o-y gain, according to CRIC.
The cumulative January to May sales in these four top cities fell 12% from a year earlier, but marked an improvement from an 18% decline in the January to April period.
Historically, housing sales taper off in May after the March and April rush.
“The typical post-peak cool-down didn’t happen this year,” said Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute. “Policy support, combined with the release of pent-up demand in core cities, provided a floor for the market in May.”
From January to May, provincial and city governments across China rolled out more than 430 property-related policies, according to the China Index Academy.
The measures included easing purchase restrictions, adjusting provident fund rules, offering direct purchase subsidies and improving urban renewal guidelines.
A key part of the policy toolkit has been the expansion of trade-in programmes, in which local governments or developers purchase old homes to help owners upgrade to new properties. By the end of May, more than 40 such programmes had been launched nationwide.
Shanghai piloted a trade-in programme in several districts in February and later expanded it to all of the city’s central areas. Guangzhou rolled out a similar initiative.
“These programmes are effective in breaking the logjam,” said Li Yujia, a researcher on residential property policy in Guangdong. “They provide liquidity to owners of old homes and create a more fluid market for new properties.”
While new home sales in major Chinese cities showed unusual resilience in May, the secondary market also held steady, with transaction volumes in 20 key cities rising nearly 20% from a year earlier, according to data from the China Index Academy.
Beijing recorded about 16,000 second-hand home transactions in May, the highest for the month since 2021 and the third consecutive month above the 15,000-unit threshold that industry watchers consider the line between a sluggish and a stable market.
Price data in May add to a growing body of evidence that the prolonged property downturn may be showing signs of bottoming out in major cities. — China Daily/ANN
