(Yicai) July 10 — China’s real estate market is likely to remain in a bottoming-out and gradual recovery phase during the second half of this year, with the pickup expected to stay highly uneven, according to the China Index Academy, an industry think tank.
The ongoing release of pent-up demand from the past few years, combined with the further easing of home-buying curbs in core cities, led to signs of temporary stabilization in the second-hand housing markets of certain key cities in the first half, the CIA’s latest property sector report said.
Sales of pre-owned homes in China’s top 30 cities rose 6 percent to 960,000 units in the six months ended June 30 from a year earlier, per CIA data. Sales in Beijing and Shanghai hit five-year highs, while those in Shenzhen jumped over 10 percent in May and June, after the city eased its property market policies in April.
Resale prices across the top 100 cities fell 2.9 percent, improving from a 5 percent drop a year ago, according to the report. But some core cities logged a modest recovery, with Shanghai notching up month-on-month gains over the past four months, and Shenzhen returning to growth in June.
By area, new home sales in those 100 cities tumbled 12 percent from a year earlier, with a clear divergence and demand highly concentrated on high-quality homes in core urban areas of major cities, resulting in year-on-year growth in first-tier cities in the second quarter, the report showed.
Meanwhile, driven by the launch of high-priced, premium projects in some core cities, the new home price index for those 100 cities had edged up 0.6 percent as of June 30 from Dec. 31.
The CIA expects resales in core cities to remain broadly stable during this half, while prices move within a relatively narrow range.
The new housing market is likely to retain its structural features: demand for high-quality units will stay resilient amid generally muted overall demand. Under the policy aim of limiting new supply and reducing excess inventory, the supply of new homes in the second half may continue to shrink, the CIA pointed out.
Buyer willingness in core cities has improved, and concerns about a major drop in local prices have eased, said Huang Yu, executive vice president at the CIA. But expectations for higher prices have not yet taken hold, so an overall market recovery still hinges on sustained improvements in transaction volumes and a rebound in household incomes, he said.
The recovery will unfold in stages, Huang predicted. Resale prices will steady first, driving a rebound in new home sales, which in turn will stimulate project investment and construction starts, he said.
Editors: Tang Shihua, Futura Costaglione