China’s housing market rout is ending as policy moves revive confidence, home sales

Some corners of China’s property market are showing surprising signs of life. Home sales in top-tier cities like Shanghai and Beijing are flying, suggesting consumers are spending on big-ticket items again, with the government throwing its full support.

A combination of policy stimulus in September and “pretty sizeable” changes in the property tax structure last month helped fuel the biggest surge in secondary market home sales in November, according to official data. The “off-season” rebound has rubbed off on new home sales as buyers snapped up all units in a high-end Shanghai project this week.

These signals are changing sentiment among major players in the industry, lifting the gloom that has enveloped the housing market for much of the past four years. Is the worst finally over?

“The secondary market has finally hit the bottom,” said Zhang Bo, chief analyst at 58 Anjuke Real Estate Research Institute, adding that further sharp declines for lived-in homes are unlikely. “The policy environment for property sales is the most relaxed it has been in over a decade.”

02:15

China sees slowest economic growth in over a year with 4.6% GDP in third quarter

China sees slowest economic growth in over a year with 4.6% GDP in third quarter

Shanghai recorded 270,500 home sales in the secondary market in November, the highest level in 44 months, while Shenzhen had a four-year high of 8,109 sales. In Beijing, 18,763 lived-in homes changed hands, or 50 per cent more than a year earlier.

China, which pledged in September to take steps to rescue the nation’s property and stock markets, has also allowed local government authorities the leeway to craft their own incentive plans. One such plan on property deed tax, which was announced last month but only took effect on December 1, is keeping the sales momentum going.