CBN丨Top cities signal easing to support property market

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Recent policy adjustments in major Chinese cities are fueling expectations that more policy fine-tuning and easing measures are likely in the coming months to support the real estate sector's steady recovery.

Sales offices of property projects under development in Beijing outside the Fifth Ring saw a significant increase in traffic over the past weekend. Even during the hottest hours, many homebuyers went out to view properties.

Beijing on Friday announced it would lift the limits on the number of home purchases outside the Fifth Ring for local residentsto boost the local property market, effective Aug. 9. The Fifth Ring road is a ring-shaped expressway surrounding the city’s central urban area. The ring has a radius of around 16 kilometers, with the center being Tiananmen Square.The home purchase restrictionon non-residents is still valid though.

Suburban areas are the main focus of homebuyers in Beijing. In terms of transaction volume, apartments outside the Fifth Ring accounted for 80 percent of the city’s new home sales and over 50 percent of second-hand house sales in the first seven months of the year, according to data from the China Index Academy.

Easing home-buying curbs will certainly have positive effects on Beijing’s property market, said Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute. However, if the number of second-hand home listings in the city is not reduced, the recovery in new house demand would still be constrained, he added.

Official data showed that Beijing’s property market experienced a recovery in sales in the first half of the year, but the market slid again in July. New home sales plunged 30 percent from a year earlier and 28 percent from June last month, while pre-owned house sales dropped 16 percent and 18 percent, respectively.

Shanghai's housing market showed signs of recovery in July. Newly-built home prices averaged CNY71,353 per square meter, up 7.2 percent year-on-year, albeit with a soft decline month-on-month, according to property consultancy Centaline Shanghai.

Among China’s four first-tier cities, Guangzhou is the only one that has fully lifted home purchase restrictions. Meanwhile, Beijing, Shanghai, and Shenzhen still retain curbs for their core urban areas, with conditional relaxations in suburban areas.

While China's real estate sector is undergoing structural transformation, there are policy tools available to manage the transition, experts noted. The central government has emphasized the importance of meeting housing demand and preventing systemic risks — a dual focus that is likely to shape upcoming policy moves across major cities.

They added that the latest development may point to a trend of calibrated policy easing, especially in top-tier cities, and demonstrate stronger policy objective to stabilize the country's property market.

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