Driven by relaxed housing restrictions and price-off promotions by developers, more home buyers in Shenzhen are rushing into the city’s new home market, while the secondhand home market is also simmering.
A total of 332 new homes in a residential project in Longhua district were sold on the first day they went on sale. According to Leyoujia Research Center, the research arm of real estate agency Leyoujia, more than 744 customers snapped up the homes in about three hours on Sunday, with the sales value hitting 2.6 billion yuan ($367.5 million).
Another residential project in Bao’an district, which also opened for sales on Sunday, saw 90 percent of its new homes sold on the first day, according to Shenzhen Centaline Research Center.
READ MORE: China's housing market sizzles on policy measures
The transaction boom came after the Shenzhen government lifted housing restrictions on Sept 29. Under the new policy, non-local people are allowed to buy properties in some districts in the city while the down payment ratio has been reduced.
Major banks on Saturday also unveiled details about mortgage loans reductions for existing homes, which will be implemented on Oct 25.
“The sluggish trend in Shenzhen’s new home market has been reversed since the launch of the new policy. New home sales of cost-effective residential projects in different areas have seen strong growth,” said Zou Shaowei, senior researcher at Shenzhen Centaline Research Center.
“Besides the policy effect, the price-off promotions by property developers are also a reason for the market improvement.”
ALSO READ: Shenzhen reports strong home sales
According to Centaline, new home subscriptions in October reached 4,418 units as of Sunday, which is equivalent to the transaction volume of the previous two months.
The pre-owned home market in Shenzhen, meanwhile, is also heating up. Some homeowners raised their selling prices after the policy introduction. Data from Leyoujia Research Center show that 57 out of 131 areas (44 percent) in Shenzhen have seen selling prices increase, compared with fewer than 10 areas previously. But the price increases in most areas have been minor — between 0.1 percent and 0.5 percent.
A housing agent surnamed Liu said he went to Hong Kong a day after the policy launch to pay the deposit for his client, who was intending to buy an apartment in the Futian district owned by a Hong Kong resident, but the offer was rejected by the seller.
READ MORE: Adjusted policies motivate realty sales
“The homeowner rejected the deal and asked for a higher price,” he said.
He Qianru, research center director at Midland Realty, said that some sellers have been overly optimistic with their increases to their selling price. The market improvement is still in its initial stage, and it remains to be seen whether transactions will continue to grow steadily, she said.
