Beijing's Impact on Home Prices and Bond Financing in October

Beijing's Stimulus Measures Boost Home Prices and Bond Financing

Beijing's latest stimulus measures have enabled developers in China to secure more funding, signaling a notable shift in the real estate landscape. In October, bond financing in the property sector rose 3.2% from last year to reach 29 billion yuan, as reported by the China Index Academy.

Developer Financing Insights

• The growth in bond financing is attributed to a low base last year.
• Despite the increase, October's figure is still down 32.4% compared to September.
• Year-to-date financing totals 442 billion yuan—down 25.6% year-on-year.

Yan Yuejin, the vice-president of the Shanghai-based E-House China Real Estate Research Institute, noted that the favorable policy environment has positively influenced funding opportunities for developers.

Legislative Support for Property Sector

In further support of the industry, the National People's Congress is discussing a fiscal package aimed at revitalizing the economy. All bonds issued in October came from state-backed home builders, such as China Resources Land, Poly Development, and China Communications Construction Company.

Market Performance Overview

• Developer bond financing interest rates fell to 2.98%, a decrease from the previous year.
• New home sales increased by 7.1% year-on-year, reflecting 435.5 billion yuan in sales.
• Despite these positive indicators, new home prices dropped 6.1% across major cities in September.
• Land purchases saw a significant decline, down 38.7% as developers remain cautious.

Current market dynamics illustrate that while bond financing is improving, home prices are still challenged, indicating a complex recovery landscape for China's property sector.