Optimized policies, hopes of stronger recovery seen boosting demand

The first May Day holiday in China after the COVID-19 pandemic control measures were optimized saw a mild pickup in property trading — and the uptrend will likely extend into the coming months, considering the macroeconomic acceleration and the anticipated further release of pent-up demand for homes, industry experts said.

The continuous optimization of property-related policies by local governments as well as the ongoing steady economic improvement will set the tone for the real estate market from now on, with hot-spot cities expected to see a more buoyant performance, they said.

Though the volume of deals for residential properties during the five-day holiday was well behind the pre-pandemic levels, transactions in key cities for both new and existing homes saw double-digit growth year-on-year, said Guan Rongxue, a senior analyst with the Zhuge Real Estate Data Research Center.

More than 5,200 new homes were traded between April 29 and May 3 in the 15 cities surveyed by the research center, up nearly 26 percent year-on-year. More than 785 pre-owned homes were also traded in six key cities, up 20 percent year-on-year, the center said.

"The data indicate that both new and existing home markets in many Chinese cities are on course to improvement, boosting market confidence," Guan said.

Pro-market measures introduced to stabilize the market proved effective during the holiday. Sales of homes will further improve and the market will regain stability by the end of this year and might even rebound, Guan said.

"A weak recovery was seen at the beginning of the year. It was followed by a bit of consolidation in key cities in February and March. Sales of commercial properties in March reported first positive year-on-year growth since July 2021," said Xie Chen, head of research with CBRE China, a commercial real estate services and investment firm.

Measures like stabilization of the property market and ensuring timely delivery of residential projects, together with the release of pent-up demand, had supported the improvement of the property market in the first quarter in terms of sales, investment, land bidding and construction, among others, said Yao Yao, head of research at JLL China, a real estate consultancy.