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China’s new home transactions during the Golden Week holiday were weaker than expected despite intensive introduction of property policy relaxation since August.
The average daily home transactions in the cities, measured by floor area, during the Golden Week Holiday (September 29 – October 6) fell by 17% from a year earlier and slid 24% from the same period in 2019, according to data compiled by real estate research firm China Index Academy.
Divergence was seen between different cities, with new home transactions in the four tier-one cities reaching 333,000 square meters , surging 62% from a year earlier, with Shanghai and Guangzhou jumping from a year earlier, while Beijing and Shenzhen sliding 31% and 46%, respectively.
In the 14 major tier-two cities, new home transactions in floor area reached 861,000 square meters during the holiday, with the average daily transactions sliding 14% from a year earlier, showed the data.
In the 17 major tier-three and tier-four cities, new home transactions in floor area reached 282,000 square meters, slumping 50% from a year earlier, showed the data.
Property projects in many Chinese cities accelerated project introduction and promotions before the holiday, but market confidence has yet to recover, said Chen Wenjing, market research director at the China Index Academy.
The weak performance came after Chinese regions introduced a series of housing policy relaxation since late July. According to the data from the academy, the number of real estate policy adjustments in September reached the highest since the fourth quarter last year; almost all regions have so far implemented to policy to use home ownership instead of mortgage record to recognize first-home qualification, and many regions have lowered the down payment requirement for first-home and second-home purchases, cut home mortgage rate and removed or eased home purchase restrictions.
However, the policy relaxations have so far failed to notably boost home transactions. In September, China’s residential property transactions by floor area picked up from the previous month, but remained lower than a year earlier, with tier-one, tier-two and tier-three/four cities seeing declines of 215, 16% and 28%, respectively.