The development road map for the real estate industry outlined in the third plenary session’s resolution could fuel the market’s recovery following a rebound in new home sales across the Chinese mainland cities in the Guangdong-Hong Kong-Macao Greater Bay Area in June, according to Cushman & Wakefield.
Sales of new homes in the nine Guangdong cities in the Bay Area jumped 19 percent to about 29,000 units in June from the previous month, surpassing the average monthly transaction volume in the second half of last year, the global real estate services firm said on Tuesday.
Alva To, vice-president and head of consulting at Cushman & Wakefield Greater China, said the buoyed sentiment came after the central government introduced property support measures in May, including scrapping the loan rate floor for homebuyers, cutting individual housing provident fund loan rates and adjusting the minimum down-payment ratio.
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Transaction volume in the nine cities plunged 40 percent year-on-year to 133,000 for the first six months of 2024, partly due to the relatively high base of comparison from the first half of 2023.
The nine Guangdong cities are Guangzhou, Shenzhen, Zhuhai, Dongguan, Foshan, Huizhou, Jiangmen, Zhongshan and Zhaoqing.
Thanks to the third plenary session’s decisions, coupled with the May policies, To said, “the mainland’s real estate market has bottomed out” and home prices in the Bay Area are expected to remain stable in the second half of this year.
He said he expects the region’s residential property transactions to grow over the next six months, with the monthly average transaction potentially hitting 28,000 to 30,000 units. This could push total new home sales to up to 313,000 units this year, although that would be 20 percent lower than last year.
The third plenary session of the 20th Central Committee of the Communist Party of China, which concluded last Thursday, stated that municipal governments will be granted greater decision making authority to regulate the real estate market.
To noted that a growing number of Hong Kong and Macao residents are contemplating buying properties on the mainland as the transportation network improves. Infrastructure projects, including the Guangzhou-Shenzhen-Hong Kong Express Rail Link, the Hong Kong-Zhuhai-Macao Bridge and the Shenzhen-Zhongshan Link, have enhanced connectivity in the region.
“Housing price differences between Hong Kong and mainland cities also make GBA properties attractive to some Hong Kong people, especially those who find Hong Kong purchase entry prices too high,” he said.
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“As Hong Kong continues to integrate with (other cities) in the Bay Area, we expect to see increasing buying interest from Hong Kong residents, supporting a more stable outlook for the Bay Area residential market.”
Investment in commercial property in the Bay Area, meanwhile, softened in the first half compared with a year earlier as high interest rates dampened sentiment. The market recorded 26 large transactions in the first six months, totaling 11.9 billion yuan ($1.6 billion). That accounted for roughly 17 percent of the overall investment market on the Chinese mainland.
The firm forecasts that logistics assets will be the “most attractive” type of real estate in terms of growth potential, as enhancement of regional transportation connectivity fuels the logistics sector and drives warehousing demand.
Contact the writer at tianyuanzhang@chinadailyhk.com
