Silver October Property Market: Second-Hand Housing Transaction Volume YoY Growth Rate Expands

Since the beginning of October, the secondary housing market in China has shown significant activity, while the new home sector continues to navigate a period of adjustment. Monitoring data from the China Index Academy indicates that from October 1 to 28, sales of second-hand residential properties in 20 major cities rose by 20% compared to the same period last year. In contrast, the area of newly constructed residential buildings sold in 30 key cities dropped by 13% year-on-year. The secondary housing markets in Beijing, Shanghai, and several second-tier cities remain notably vibrant. In Beijing, the new home market has experienced growth, largely due to an influx of inventory from earlier in the year and the strong performance of premium projects located in central areas. However, most cities are still reporting year-on-year declines in new home transactions.

As the year draws to a close, the implementation of a housing loan interest discount policy is expected to alleviate the financial burden on eligible homebuyers, potentially stimulating demand for owner-occupied properties. Coupled with promotional activities from real estate companies, this could bolster market transactions. The ongoing activity in the secondary housing market may also aid families looking to upgrade their homes by freeing up funds, thereby fostering a greater demand for improved housing options. High-quality projects in major cities are anticipated to continue performing well in terms of inventory turnover, while the overall new home market remains in a gradual recovery phase.

A recent initiative by the Ministry of Finance and other departments, effective from October 1, introduced an interest discount policy for housing purchase loans. Under this policy, families buying their first home with newly issued personal housing loans for properties no larger than 120 square meters and priced at or below 1.5 million yuan will receive a one-percentage-point reduction in annual interest. This policy applies to both new and second-hand homes. The secondary housing market benefits from a wider selection of properties that qualify for these interest discounts, making it more accessible for first-time buyers compared to the new home market.

According to the China Index Academy, the number of second-hand residential units sold from October 1 to 28 increased by 20% year-on-year, marking a growth acceleration from previous months. Cumulatively, from January to October, 1.22 million second-hand residential units were sold in the 20 key cities, reflecting a 7.5% rise compared to the same period last year. In terms of specific cities, Beijing and Shanghai recorded sales of 11,000 and 21,000 second-hand residential units respectively during this time frame, showing year-on-year increases of 9% and 32%. Cities such as Suzhou and Ningbo experienced growth rates exceeding 30%, while Hangzhou, Qingdao, Nanjing, Wuxi, and Wenzhou reported increases surpassing 20%. Additionally, many third- and fourth-tier cities also maintained rapid year-on-year growth in their second-hand residential transactions.

In the new home market, data from the China Index Academy reveals that the transaction area of newly built commercial residential properties in 30 key cities experienced a 13% year-on-year decline from October 1 to 28. The supply of new homes tends to focus on improved-type properties, and in certain cities, the availability of housing that meets the criteria for the interest discount policy is relatively limited. Consequently, the policy's impact varies significantly across different cities and projects.

In terms of city-specific performance, Beijing saw a 28% year-on-year increase in the transaction area of newly built commercial residential buildings during the same period, largely driven by a substantial supply introduced in September. Conversely, Shanghai, Guangzhou, and Shenzhen reported year-on-year declines of 1%, 6%, and 8% respectively. Among second-tier cities, Jinan, Nanjing, and Xining all experienced growth rates exceeding 10% due to last year's lower baseline figures, while most other cities continued to show year-on-year declines.

With respect to supply, the area of newly constructed commercial residential buildings approved for pre-sale in 30 key cities also saw a year-on-year decline from October 1 to 28. Only a few key cities, such as Beijing, exhibited noticeable year-on-year growth. The reduction in land transactions and new construction starts has limited the number of available projects for sale, which, in turn, has constrained the sales demand in some regions.

Recent trends indicate that demand for new residential properties is primarily concentrated on projects equipped with mature supporting facilities, high-quality offerings, and reasonable pricing. Areas with established educational, commercial, and transportation infrastructure continue to attract homebuyers. Innovations in property design, such as open-air terraces and integrated social spaces, are enhancing the appeal of these projects to families seeking upgraded housing options. Some developers have adopted real-scene demonstration areas and near-completed housing displays to provide potential buyers with a clear understanding of product standards, thereby alleviating concerns about their purchases.