Surging transactions for both new and pre-owned homes in Shanghai in particular, and buoyant housing markets in other major Chinese cities in general, indicate the supportive measures rolled out in the first half have helped boost market sentiment and meet demand, said industry experts and insiders.
"Sales of new homes rose rapidly in June and reached a new high in the past 12 months," said Lu Wenxi, a market analyst with Centaline Shanghai, a property agency.
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Citing the firm's data, Lu said new home sales, in terms of physical size, reached 805,000 square meters in June, up 61 percent month-on-month.
Some 24,000 pre-owned homes were bought in June, the highest level in the past three years, said Lu.
"The past month has been extremely busy for us. Our workload doubled and we had to work until midnight. Usually, those working the evening shift sign off at 9 pm," said Wu Huifang, an employee with housing agency Sinyi Realty in Shanghai's Changning district.
Industry experts attributed the sales surge to a series of supportive policies. Shanghai became the first top-tier city to announce new housing policies to stimulate the market, following the supportive stance adopted by the central government on May 17.
Fresh measures were announced on May 27, which became effective on May 28. Home purchase restrictions were adjusted; reasonable home living requirements were supported for families with more than one child; credit policies were optimized; trade-in deals received support; and land and housing supplies were optimized.
"Apart from Shanghai, the southern city Shenzhen in Guangdong province has seen upbeat sentiment as sales of existing homes are reaching a high level. In the national capital Beijing, the housing market rebounded as well after the municipal government eased certain restrictions on June 26," said Meng Xinzeng, an analyst with the China Index Academy, a market data provider.
In June, 100 major cities monitored by the academy reported that the decline in their new home sales narrowed to 20 percent from 30 percent in May. The average weekly sales of apartments grew 14.5 percent month-on-month and 24 percent year-on-year, Meng said.
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The central government stressed the significance of the real estate industry, urging it to focus on market stabilization and destocking. The optimization measures introduced by local governments have led to an obvious boost in market sentiment and release of homebuying demand, Meng said.
Lu said improved sales in the pre-owned home segment came on the back of efforts of local governments to destock, and it may take time for other policies to have further effect.
"There is still room for first-tier cities to adopt more measures to deepen the mild recovery of the new home segment. Considering the low base of the second-half data, some important cities are expected to see their housing market bottom out and achieve stability in the second half of the year," Meng said.
