Policy incentives spur new, pre-owned home purchases

Updated: Sep 12, 2023 By Liu Yukun China Daily Print
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Potential homebuyers check out housing projects at a real estate agency in Beijing, June 24, 2023. [Photo/VCG]

Ever since major cities in China launched policy incentives in late July to warm up the realty market, housing agent Wu Lei's phone has turned into a 24/7 hotline, with a deluge of inquiries on property purchase being made every day.

"We are currently working around the clock to greet visitors. Some homebuyers are willing to make even late-night appointments," said Wu, who works in Beijing for real estate agency 5i5j.

Property agents such as Wu have been very busy lately because policy measures, adopted to help the troubled real estate sector recover, are buoying up market sentiments and helping drive up transactions for both new and pre-owned homes, which in turn are contributing to the overall economic recovery, experts said.

So far, more than 20 cities — including first-tier cities Beijing, Shanghai, Guangzhou, the capital of Guangdong province, and Shenzhen, also in Guangdong — have adopted the policy to recognize households with mortgage records but no local property ownership as first-time homebuyers, making them eligible for favorable down payments and lower mortgage rates.

Various regions have also introduced a combination of encouraging policies, such as selling-old-for-new schemes, tax subsidies and reduced housing loan interest rates.

According to realty market analysis provider China Index Holdings, Beijing witnessed a 16.9 percent weekly increase in new home sales area to 103,000 square meters last week. Shenzhen saw a 3.8 percent weekly rise in new home sales area to 38,000 sq m during the same period.

"New home transactions have been unexpectedly brisk. Homebuyers I receive are mostly young couples expecting to purchase their first home in Beijing and second-time buyers looking to improve their living conditions," said Li Chao. She currently manages sales of a new housing project located in northeastern Beijing.

Hong Kong-listed realty developer Sunac China Holdings saw the volume of transaction in its real estate project One Sunac Opus, located in Beijing's Chaoyang district, reach 5.62 billion yuan ($770 million) with the sale of 169 homes on Sept 3, the opening day. The houses were sold for more than 30 million yuan each.

"Such strong project sales have triggered a substantial influx of funds, which will have a positive impact on business operations of property firms. They are expected to yield improved financial performances," said Yan Yuejin, research director of Shanghai-based E-House China Research and Development Institution.

Pre-owned home sales also saw a boost in major cities. Around 5,000 pre-owned homes were sold over the past week in Beijing, nearly half of August's total, according to realty agency Centaline Property.

The scene in Shanghai is no different, as families are keen to look at available properties that allow children to attend good schools.

Yang Jiarong, a manager at a Shanghai office of Sinyi Realty, said, "We have seen a 20 percent to 30 percent increase in appointments made by prospective homebuyers."

Wang Ying in Shanghai and Wang Zhuoqiong contributed to this story.

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