The positive buying sentiment in the new-home market across major Chinese cities has greatly boosted confidence and expectations for a strong sales season in March and April, said industry experts on Thursday after digesting the home transaction data of the Spring Festival holiday.
The Chinese New Year holiday started on Jan 28 and wrapped up on Tuesday. According to official data, the 28 major Chinese cities monitored by the China Index Academy reported an 8 percent growth in daily new-home transaction space year-on-year.
More specifically, Guangzhou, Guangdong province witnessed a 47 percent year-on-year surge in new home trades during the Spring Festival holiday, with Beijing recording a moderate growth of 5 percent. Strong growth was also seen in second-tier cities including Nanjing, Jiangsu province; Nanchang, Jiangxi province; and Wuhan, Hubei province.
READ MORE: More tweaks ahead for property policy
"It is expected that transaction volume of both new and pre-owned homes in these cities would welcome an evident rebound after the holiday," said Li Yifeng, deputy director of research at the China Index Academy.
"The overall housing market saw stable performance during this year's Chinese New Year, despite the fact that the holiday is a conventional low season for home transactions. As a result, a significant rebound is highly expected after the holiday," Li said.
The positive feedback in the market — coupled with factors like warm weather, year-end bonuses, stable work and life, and promotions launched by developers — is likely to persuade more potential homebuyers to make purchases, Beijing Business Today reported.
"The increase in the number of visits is encouraging, which indicates the previous policies are taking effect and homebuying demand is still strong," said Cao Xiaoning, a real estate agent for a residential project in Beijing's Shijingshan district developed by China Overseas Land and Investment Ltd, a unit of Beijing-based China State Construction Engineering Corp.
Yan Yuejin, deputy head of the Shanghai-based E-House China R&D Institute, said the improved performance over the holiday shows the real estate market adjustment has bottomed out and is headed for a course of stabilization.
"Currently, the property market is fully adjusting itself, and we expect homebuyers to become more optimistic regarding the sector's outlook, and an early spring warming may be around the corner," Yan said.
ALSO READ: China's real estate tax cuts yield $1.6 billion in first month
Both new and pre-owned homes reported positive growth before the Chinese New Year holiday in January. In the 30 cities China Index Academy surveyed, new home traded space grew 4 percent year-on-year between Jan 1 and Jan 27, and the 20 key cities' existing home trade volume surged 19 percent from a year ago during the same period.
"With people returning to work after the holiday, their homebuying plans are also getting back on the right track. Therefore, a home transaction rebound is due in the near term," Li said.
Li added that considering the low base of the first quarter in 2024, new home traded volume is likely to be stable in the first quarter, and home prices in the secondary market will hopefully become stabilized.
"But the market is still in need of policy support for its sustained stabilization," said Li.
