(Yicai) Sept. 8 — Shenzhen has seen viewer numbers at many new residential development projects jump after the city became the last of China’s four first-tier cities to lift home-buying restrictions in non-core areas.
Shenzhen residents can buy an unlimited number of homes in all areas of the city except in Futian and Nanshan districts and the Xinan sub-district of Bao’an starting from Sept. 6, while non-residents can purchase up to two homes, the city authorities announced the day before.
The number of viewers at most new housing projects in Shenzhen jumped by more than 10 percent on the day the restrictions were relaxed, several local realtors told Yicai. Some clients who now qualify under the eased policy signed purchase agreements the same day, they noted.
“Customers who were on the sidelines took the initiative to come and view houses over the weekend,” a person in charge of a project in Guangming district said to Yicai. In addition, a nearby project launched new properties, attracting even more visitors than usual, the person pointed out.
Even in Futian, where restrictions remain in force, a sales manager at one development sensed a rebound in interest. “Our project gets on average 150 to 180 viewers a week, with the number expected to exceed the daily average by 10 percent to 20 percent,” the person said on Sept. 6, noting that the day was not yet over.
Homes in the project are priced at more than CNY100,000 (USD14,010) per square meter, with buyers being relatively well-off, so their buying intention is tied to confidence in the market, the sales director noted. “We can feel that customers’ confidence has increased.”
The extent of Shenzhen’s easing went beyond expectations, largely because the local property market has not yet emerged from a prolonged downturn, said Li Yujia, deputy director of the Guangdong Provincial Housing Policy Research Center. Second-hand home prices have been declining for over four years, and the land market is relatively subdued, Li added.
Builders and buyers had been waiting for Shenzhen to relax its real estate policies for several months, according to Zou Shaowei, a senior researcher at the Shenzhen Central Plains Research Center. The new measures are expected to restore market confidence, speed up project launches, encourage buyers to return, and fuel a rebound in sentiment and sales, according to Zou.
After implementing the new policy, certain home-buying thresholds remain in Shenzhen’s core areas, preventing the re-emergence of real estate market speculation, Zou said. Removing restrictions in non-core areas can attract non-local buyers and increase effective demand while accelerating de-stocking, stabilizing home prices, Zou added.
While modest restrictions remain in Shenzhen’s core urban areas, preventing a return of speculation, non-core areas should see prices stabilize as outside buyers stimulate demand and hasten inventory absorption, Zou noted.
With the arrival of the peak sales season this month and next, the policy easing will bring a clearer inventory reduction in Shenzhen’s outlying areas, Li noted, adding that the new homes market will likely pick up.
New home sales in Shenzhen will likely jump this month from last month, possibly by as much as 50 percent, according to Xiao Xiaoping, dean of the Shenzhen Shell Research Institute.
More Chinese cities are expected to follow Guangzhou, Beijing, Shanghai, and Shenzhen in easing their property market policies, said Chen Wenjing, director of policy research at the China Index Academy.
China’s first-tier cities introduced strict home-buying limits at a time of heavy speculation. Guangzhou was the first to lift the curbs last September as the market weakened, while other cities made policy tweaks later in the year. Beijing and Shanghai further eased restrictions in non-core areas last month.
Editors: Tang Shihua, Martin Kadiev