Shanghai, Beijing home sales surge after policy easing

TWO of China’s biggest cities posted a jump in home transactions, following the latest policy easing efforts to improve sector sentiment.

The transaction area of Shanghai’s second-hand homes increased by 25.7 per cent from Dec 15 to 18, compared with the previous week, according to an HSBC Holdings report on Wednesday (Dec 20). The average daily sales of new home units in the city rose nearly 41 per cent, while that of Beijing jumped 122 per cent.

“Faster turnover on secondary homes may boost new home transactions as it facilitates demand for upgrading homes,” Erin Xin and Jing Liu, HSBC economists, said in the report.

Beijing and Shanghai reduced downpayment ratios and eased the threshold for some types of housing to be qualified for lower mortgages. The moves came after existing home prices tumbled the most in more than nine years, shattering confidence among homebuyers and market watchers.

Last week, new home sales in 30 major cities increased by 6 per cent compared with the previous week, with sales in top cities driving the growth, the report said. However, transactions in smaller so-called tier-three cities remained low.

Sales figures in the subsequent weeks will provide a better gauge on whether the slew of policies can ameliorate the property slump. Home sales petered out in less than two weeks after regulators issued measures to stimulate the market in August. BLOOMBERG