China Property Market Faces Stimulus Amid Slight Sales Increase in September

China Property Market Sees September Sales Growth

The China property market is experiencing a modest uptick in sales due to recently announced monetary stimulus measures. Major developers, including China Vanke, Country Garden, and Shimao Group, reported increased sales in September, following Beijing's efforts to invigorate the sector. Specifically, Shimao saw a 13.1% month-on-month increase in contracted sales. This surge suggests a positive shift in buyer sentiment, aided by lowered mortgage rates and relaxed homebuyer restrictions implemented by the People's Bank of China.

Challenges in Sustaining Growth

Despite the recent sales growth, experts warn about the sustainability of these gains. Analyst Raymond Cheng from CGS International Securities notes that these upticks are primarily results of a low comparative base from last year. As local governments continue to face challenges concerning property acquisitions and policy implementation, the future stability of sales remains uncertain.

Effects of Policy on Property Developers

• The finance ministry has yet to deliver broad fiscal stimulus.
• Local governments are encouraged to stabilize the property market through special bonds.
• This may allow them to acquire unsold homes and support developers’ sales.

New home transactions soared 65% year-over-year during the recent golden week, a strong indicator of recovery efforts, but the broader picture shows that sales across top builders fell 38.8% in the first nine months of this year.

The Path Forward

Industry experts agree that while September’s results mark an improvement, the path to a full recovery for the China property market remains uncertain. With projections estimating a sustainable recovery not visible until mid-2025, cautious optimism is advised.