A total of 6,596 pre-owned flats changed hands last month, down 46 per cent from January. The transacted prices stood at 59,030 yuan per square metre, down 1 per cent month on month.
These lacklustre numbers came despite Beijing and Shanghai reducing down-payment ratios for first-time homebuyers and expanding the definition of non-luxury homes to benefit more buyers. The incentives were aimed at propelling homebuying by offering lower mortgage rates and cutting home purchase taxes.
Chinese home sellers turn to social media to boost their chances in weak market
Chinese home sellers turn to social media to boost their chances in weak market
Residents that do not own property in major cities became first-home buyers in September as authorities decided to look past their previous credit records. In the past, certain categories of people who had taken out a mortgage – and even if the loan was fully repaid – were disqualified from being considered first-time homebuyers in major cities.
First-time homebuyers are permitted to take mortgage loans by making a 35 per cent down payment, compared with the 70 per cent requirement for second-time buyers. They also enjoy a preferential mortgage rate that is about 0.7 percentage points lower than the standard.
Over the past three decades, residential properties have been viewed as safe bets by Shanghai residents because prices surge constantly, bringing buyers investment returns of as much as 20 times. But Shanghai’s housing market peaked in mid-2022, and has since retreated amid a slowing economy on the mainland.
Beijing’s bid to regulate rental fees will bolster leasing market, analysts say
Beijing’s bid to regulate rental fees will bolster leasing market, analysts say
Miao Yufa, a sales manager at property agency Lianjia in Shanghai, said prices of lived-in homes have dropped by more than 20 per cent from the heights seen in July 2022, and the downward trend will continue as more homeowners are now willing to cut prices to seal deals.
“For a flat worth 10 million yuan, buyers would require a reduction of at least half a million,” he said. “Some owners, eager to cash out, will accept the price.”
China’s new home sales fell 16.5 per cent year on year to 5.4 trillion yuan in 2023, according to the China Real Estate Information Corporation.
China’s home prices fall at a slower pace as Beijing moves to resuscitate sector
China’s home prices fall at a slower pace as Beijing moves to resuscitate sector
Real estate, along with related industries such as home appliances and construction materials, accounts for about a quarter of the mainland Chinese economy.
Sam Xie, CBRE China’s head of research, suggested authorities in Beijing and Shanghai offer more tax incentives to bolster home purchases, such as personal income tax rebates for homebuyers.
“Real estate is of vital importance to the city and national economies,” he said. “It is time to implement some strong sweeteners to encourage homebuying.
“A recovery of the property sector will eventually help trigger a turnaround of the economy.”