SHANGHAI (AFP) – At the end of a week in which China’s leaders announced their biggest economic stimulus measures in years, real estate agents in financial hub Shanghai expressed cautious optimism at policies intended to encourage home buying.
Chief among the threats to the government’s goal of hitting five percent growth in 2024 is a prolonged property sector crisis, which has so far resisted incremental efforts at resolution.
At a meeting of the Communist Party’s top decision-making body on Thursday, leaders said they would loosen restrictions on buying houses, lower interest rates on existing mortgages and generally “promote the construction of a new model for real estate development”, according to state media.
That was welcome news to those working in Shanghai’s property market.
“Especially since last year, the real estate market environment has dropped a lot,” an agent in Shanghai’s former French Concession Tao Yuan told AFP.
“The city centre here has dropped a lot, and the whole country has declined a lot too… The main reason is that the economic environment is not good.” He said he had followed the week’s announcements with interest. “In our first-tier cities, especially in Shanghai, if they liberalise purchase restrictions, I think there’ll be a big wave in this market,” he said.
Realtor Mary Yang told AFP, “Six months ago, there was perhaps a lot of evidence people were just waiting and seeing. “I think that maybe the Chinese market will go up steadily after October – there’s still a lot of demand.”
Property long served as a vital growth engine, but in 2020, regulatory curbs on excessive borrowing and speculation narrowed access to credit.
Mounting debt and stalled construction have plagued the country’s leading firms ever since, rocking buyer confidence and reinforcing already sluggish consumption.
He Jiajun’s family, who have owned a real estate business in central Shanghai for 20 years, had a front row seat as the reining in of developers trickled down to the real estate market as a whole.
“The industry went downhill this year” in particular, He said.
“We have more consumers who want to sell their house, but less consumers who want to buy houses.”
However, he said he hoped the new measures would mark a return to growth.
The housing market has normally reacted quickly to shifts in policy direction, he said.
It’s “kind of like the fashion industry”, he added – “sometimes… the old trends come back”.
But it was too early to tell whether this week’s announcements had influenced prospective home buyers, said Tao.
“The real effect won’t be so fast, there will be a time lag,” he said.
“But as long the policy coming from above is strong, I think I am still optimistic about the future.”
