Source: China State Council Information Office
An aerial drone photo taken on Jan. 16, 2024 shows people waiting to receive the keys to their new homes at a relocation residential complex in Shijiazhuang, north China’s Hebei Province. (Xinhua/Yang Shiyao)
In a year of heightened challenges, China’s property market is showing clearer signs of recovery, bolstered by well-targeted policies that have restored confidence and rekindled demand.
In late September, a key meeting convened by the Political Bureau of the Communist Party of China Central Committee emphasized the need to stabilize the property market and reverse its downturn, calling for adjustments to housing purchase restrictions, reduction in interest rates on existing mortgage loans, and improvement to land, fiscal, tax and financial policies.
In keeping with these imperatives, authorities have acted decisively to reduce home-buying costs, ease mortgage burdens, and provide critical support to first-time homebuyers and those looking to upgrade their housing.
On September 29, the country’s central bank instructed commercial banks to reduce interest rates for existing housing loans, including first and second home mortgages, by no lower than 30 basis points below the loan prime rate (LPR), a market-based benchmark lending rate, by October 31, 2024, to ease financial burdens on property owners.
Following this, major cities, including the Chinese capital of Beijing and the cities of Shanghai, Guangzhou and Shenzhen, have adjusted their real estate policies, unveiling a raft of measures to boost local property markets.
These new initiatives represent a further step in the ongoing policy push, building on landmark measures announced on May 17 that included cutting minimum down payment ratios, setting up a relending facility for affordable housing, and pledging to deliver unfinished homes.
Together, these efforts are swiftly reflected in the latest market data. According to the National Bureau of Statistics (NBS), the decline in the prices of commercial residential homes in the country’s 70 large and medium-sized cities narrowed on a year-on-year basis in November.
Home transactions also showed a turnaround in October, with new home transactions reversing a 15-month decline and rising 0.9 percent year on year. The total transactions of both new and second-hand homes grew by 3.9 percent, marking the first increase following eight months of drops.
The market’s renewed confidence can be traced to several high-level meetings where a flurry of policies to support the property market were unveiled, sending a wave of optimism, said Lu Wenxi, a market analyst with the real estate agency Centaline Property, highlighting notably active second home transactions in major cities like Shanghai.
The shift in market sentiment is palpable on the ground. In a bustling real estate office in Beijing’s Chaoyang District, a manager described the past two months as the busiest period of this year. “I sometimes have to take clients on seven viewings in a single day, barely having time for lunch,” he said.
This rebound signals the start of a recovery, but long-term stability also hinges on rebuilding market confidence, particularly ensuring the timely delivery of housing projects.
In this respect, the “white list” mechanism launched in January has played a pivotal role, offering targeted financial support to eligible real estate projects.
As of the end of October, loans approved for “white list” real estate projects had exceeded 3 trillion yuan (about 417.24 billion U.S. dollars). By the end of this year, the approved loan amount for these projects is expected to reach 4 trillion yuan.
The current rebound might be the strongest in two years, largely driven by restored market confidence, said Gao Yuan, director of the Beijing Lianjia Research Institute. He anticipated lasting momentum as buyers and sellers steadily return, pointing to a more sustainable recovery.
The focus on stabilizing the property market is a part of the country’s broader drive to anchor expectations and secure economic growth. In its recent tone-setting Central Economic Work Conference, the country stressed the importance of “stabilizing expectations” as a key objective for the coming year.
Analysts say these expectations — often the unseen force that drives market sentiment — are considered a linchpin for overall economic recovery.
The latest business activity and expectation indices reflect growing optimism among market players. In October, the property sector’s business activity in the purchasing managers’ index rose by 2.5 percentage points month on month, while the business expectation index climbed by 1.8 percentage points.
“With improved expectations, the market is sustaining a sound recovery from the previous downturn,” noted NBS spokesperson Fu Linghui at a press conference on Monday.
After three years of adjustment, “the real estate market is starting to bottom out as the policies take effect,” the Ministry of Housing and Urban-Rural Development noted at a recent press conference.
Beyond the goal of stabilization, China’s housing policies are also shifting focus towards quality and sustainability. The emphasis is no longer merely on “having a home” but on “having a better home,” aiming to ensure a resilient rebound capable of weathering future challenges.
Urban renewal projects spearhead this transition, breathing new life into older neighborhoods and improving living conditions for millions. Over 66,000 such projects were implemented in 2023. In 2024, another 54,000 projects are set to revitalize aging residential areas.
Looking ahead to 2025, a report by China Minsheng Bank noted that market confidence is the golden key to stabilizing the property sector, urging further efforts to foster confidence, guide expectations, and ensure the successful implementation of existing and upcoming policies.
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