According to property investment and sales data from the National Bureau of Statistics (NBS), China’s real estate market is showing promising signs of a recovery. The data suggests that a rebound is underway, which is expected to bring about further market stabilization and provide a boost in confidence in the coming months.
Li Yujia, the chief researcher at the Guangdong Planning Institute’s residential policy research center, said, “The greatest change for real estate in the first two months was the positive growth in floor space of completed construction, ending 11 consecutive months of declines, which reflects the efforts in ensuring real estate property deliveries for over a year have made promising progress.”
In the January-February period, the amount of real estate space completing construction reached 131.78 million square meters, up 8 percent year-on-year. Among them, 97.82 million sq m of residential space was finished, representing a 9.7 percent YoY increase. This is the first time since last year that home sales have seen a positive year-on-year growth.
Liu Lijie, a market analyst from Beike Research Institute, explained, “the market recovery is a result of multiple efforts made, including ensuring residential project delivery, improving real estate developers’ reasonable financing, lowering home purchase costs due to local policy optimization, as well as improved homebuying confidence.”
The improved market liquidity at the beginning of the year has also helped eliminate risks for major property developers. Although China’s investment in property development declined by 5.7 percent YoY to 1.37 trillion yuan in the first two months, the investment momentum is rising after the year-on-year drop of 10 percent seen last year.
Financial support measures are continuing to take effect, and home buying activity is witnessing a clear improvement. UBS Global Wealth Management’s chief investment office noted, “Although it is unlikely there will be further large-scale stimulus policies, we believe the central government will continue its support for the sector by rolling out small financing and demand-boosting measures within the year. In our view, the stabilization of the property market is extremely important for China in achieving a GDP growth target of 5 percent in 2023, especially considering the vital role of a consumption recovery in the broad economy.”