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Housing sector showing signs of spunk with pre-owned units popular

By WANG YING in Shanghai | China Daily | Updated: 2023-01-31 07:05

Potential homebuyers check out housing projects at a real estate agency in Huizhou, Guangdong province, in December. [ZHOU NAN/FOR CHINA DAILY]

The Spring Festival holiday, normally a slow season for home sales in China, saw transactions pick up for pre-owned homes in some major Chinese cities, which experts said signals a potential rebound in the sector.

In the 50 key cities tracked by Beike Research Institute, trade volume of existing homes soared 57 percent year-on-year during the holiday, and sales in terms of traded area recorded in the first 27 days of January approached that of the previous month, according to the research institute of KE Holdings Inc, a housing transaction and services platform.

Among them, transactions in four major cities situated in the Beijing-Tianjin-Hebei region — Beijing, Langfang, Tianjin and Shijiazhuang — continued their recovery after December, with total sales already surpassing December's total, it added.

Similar recovery signals appeared in terms of visits made by potential homebuyers to check apartments. Beike said visits made to existing homes rose 28 percent in the 50 cities. Visits in Chengdu, Sichuan province, and Chongqing increased by 1.5 times and 100 percent, respectively, while those in Shenzhen, Guangdong province soared 86 percent, said Li Yujia, chief researcher at the Guangdong Planning Institute's residential policy research center.

"Apparently, potential homebuyers are becoming active again," Li said.

After a two-month decline, the pre-owned housing market staged a positive growth month-on-month for home prices in January, as the average trading price in 100 major Chinese cities edged up 0.15 percent to 15,697 yuan ($2,324) per square meter, said the Zhuge Real Estate Data Research Center, a market tracker.

The mild recovery is attributable to the optimized COVID-19 response and a handful of supportive measures announced at the end of last year, which helped boost homebuyer confidence, said Chen Xiao, senior analyst with the center.

Although pre-owned home trading prices were still below the average level of the previous year, meager growth is projected to appear in February, Chen said.

Amid the rising activity in the pre-owned housing market, the new home sector has yet to show signs of a nascent recovery.

New home transaction volume remained at a low level during the week between Jan 21 and Friday, down about 21 percent from the same period of last year, although visits made to home projects in major cities including Beijing, Hangzhou in Zhejiang province, Xi'an in Shaanxi province, and Chengdu saw a year-on-year growth, said the China Index Academy.

"This year is supposed to be a year of recovery for the property market, especially given the existing supportive measures," said Chen Wenjing, director of research at the academy.

In recent months, the nation's financial regulatory departments have launched a wide range of policies one after another covering credit, bonds, presale supervision funds, mergers and acquisitions of real estate developers among others to ensure the property market's stable and healthy development.

In addition, the nation's financial regulators earlier in January released an action plan that mainly focuses on 21 tasks to enhance the operating cash flow of prime developers, guide their balance sheets back to a safe range and promote a steady transition of the sector to a new development mode.

The recovery may appear in first- and second-tier cities initially, with strong housing demand, while it may take more time to spread to smaller cities, Chen added.

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