Property expected to see sound spring recovery, experts say(2)

Encouraging signs

Some positive signs relating to the property market were seen in National Bureau of Statistics data released in mid-March.

"In month-on-month terms, the new home price index drop in 70 major Chinese cities has been narrowing for three consecutive months," Yan said.

"Given the continuous supportive measures from local governments, buying enthusiasm as well as home sales volume, both picked up in March, making us believe the home price data stabilization is on a solid footing," Yan said.

According to Brodie, secondhand housing transaction data in China's four first-tier cities — Beijing, Shanghai, Guangzhou and Shenzhen — indicated a rebound continuing into March. The daily transaction volume in Beijing and Shenzhen exceeded 1,000 units; Shanghai's average daily transaction volume reached twice that of February; and Guangzhou's secondhand housing market activity also increased.

"Given that the property market is still at the stage of adjustment and transformation, some time is still needed for the normalization of the new-normal market," Brodie said.

JLL China's chief economist Pang said although sales by floor area continued their year-on-year decline due to the high base they were coming off last year, sales volumes of both new and pre-owned homes rebounded after the Chinese New Year. Overall market prices and sales of products in the real estate industrial chain have also stabilized, he added.

Pang said he expected the fundamentals of the Chinese real estate market to improve in the first quarter, as local governments pushed for more optimization of the market. The volume of new home transactions will see a mild recovery and market activities in large cities will gradually improve, with signs of a stable recovery in property development investment and construction, he added.

Time to move

Wang Shu, 35, who works at a State-owned company, recently sold his 46-square-meter one-bedroom flat in Shanghai's Yangpu district and purchased a 78 sq m two-bedroom one in the same district. "From my personal experience, the current market adjustment offers the best timing for selling an existing home for a better one," he said.

Although Wang pays a higher monthly mortgage, it is more important to him that his son grows up in a comfortable and spacious living environment.

The market sentiment index in 50 key cities has risen for three consecutive months since December, according to data collected by Zhuge Real Estate Data Research Center, which also projected the index to maintain the rebound.

Pre-owned home transaction volumes in core cities have seen weekly rises since the second half of last year, which continued into March, said CBRE's Chen citing a report by the China Index Academy. The transaction volume of new homes will also see a mild recovery.

"Therefore, it is predictable that a mild sales pickup will appear in some major cities this spring, though their performances will vary from city to city," Chen added.

Brodie said the property market is still in the process of adjustment and transformation due to the combined effects of the macroeconomic transition, demographic changes, housing supply, and the principle of housing without speculation.

"Once a new-normal market status quo is reached and achieved, then we will see a healthy and stable real estate market emerge and come to fruition," he said.

JLL's Pang said, "Despite the challenges and difficulties in property development investment, new commercial housing sales will hopefully achieve stabilization both in terms of volume and value in 2024."

With further improvement of property policies, it is only a matter of time before the 20th National Congress of the Communist Party of China's vision for a housing system that takes into account the happiness of the Chinese people is realized, Pang added.

The vision promises to "move faster to build a housing system featuring multiple suppliers and various channels of support that encourages both housing rentals and purchases".