With a jump in transactions in the largest cities, new home sales in 16 Chinese cities increased for the second week in a row as mood continued to strengthen following Beijing’s implementation of a flurry of stimulus policies and the lifting of strict COVID-19 rules.
According to floor area, sales in 16 specific Chinese cities increased by 40.9% between February 5 and 11 compared to the previous seven days, according to a report released on Monday by China Index Academy, one of the largest independent real estate research organizations in the nation. Weekly growth from January 29 to February 4 was 707.3%.
Last week, home sales in Tier-1 cities, such as Shanghai and Beijing, increased 72% from the previous week. Sales increased by 103.8% in Shanghai and by 65.7% in Beijing week over week.
Since late last year, the government’s robust assistance measures have helped sentiment gradually improve. Analysts caution that the recovery is still a work in progress since confidence has not yet fully returned and because a private study reveals that home prices and sales fell in January.
Seasonal variables, such as China’s Lunar New Year celebrations, which began on January 21, may have further distorted the data.
China’s property market, which makes about 25% of the country’s GDP, has been hindered by weak demand and growing developer debt defaults.
According to central bank data released on Friday, demand for home loans, primarily mortgages, increased but lagged behind the increase in business credit. While business loans increased to 4.68 trillion yuan from 1.26 trillion yuan in January, household loans increased to 257.2 billion yuan from 175.3 billion yuan in December.
According to figures released on Monday by the Shanghai-based E-house China Research and Development Institution, new home sales declined 37% in January across 70 cities.