Chinese Housing Authorities Pledge Support for Property Market Recovery in Tier-One Cities

In a bid to revive the struggling property market, housing authorities in China's tier-one cities, including Beijing, Shenzhen, and Guangzhou, have announced their commitment to supporting the housing sector.

The Municipal Commission of Housing and Urban-Rural Development in Beijing and Shenzhen released official statements on their WeChat accounts, vowing to meet the demand for housing and promote stable and healthy development in their respective housing markets.

Following this move, local newspaper reports revealed that the Guangzhou Municipal Commission of Housing is planning to implement loosening measures to further bolster housing demand and support the city's property market.

The recent actions by these cities, known for having implemented strict property measures, came after China's Minister of Housing and Urban-rural Development, Ni Hong, stated that additional easing measures for the property sector would be introduced. These measures include reducing mortgage rates and cutting down-payment ratios.

This pledge follows the Politburo's commitment, the Communist Party's top decision-making body, to adjust and optimize property policies to gradually revive the industry through 2025. Notably, the slogan "housing is for living, not for speculation" was omitted from the official announcement for the first time in five years, fueling speculation that China may ease restrictive property measures in tier-one and tier-two cities.

Ting Lu, chief China economist at Nomura, suggested that policymakers in Beijing are growing increasingly concerned about economic growth and are recognizing the need to support the faltering property sector. Despite the recent easing measures, Lu urged caution and emphasized the need for a clearer roadmap regarding the scale and impact of these initiatives.

The news of potential easing measures brought a surge in property stocks, with the Hang Seng Mainland Properties Index rising 2.5% on Monday, following a 15.4% surge the previous week.

Yan Yuejin, director of E-house China Research and Development Institution, highlighted that the official statements from tier-one cities indicate a likely shift in government policies on real estate, with potential measures such as lower home-buying thresholds and reduced costs of loans and taxes.

Analysts and investors welcomed the news, anticipating lower down payments and mortgages for homebuyers in the near term. The optimistic outlook is further supported by the slight price increase of new homes in Beijing in June, while prices in Guangzhou and Shenzhen saw minor declines, according to National Bureau of Statistics data.

Despite the positive market response, experts caution that the scale and extent of the easing measures should be monitored closely, given the authorities' cautious approach. Nonetheless, the commitment to support the housing market represents a significant development, potentially signaling a positive shift for developers and homebuyers alike in the near future.

By fLEXI tEAM