Chinese cities such as Guangzhou and Nanjing have seen a recovery of second-hand home transactions following their relaxation or lifting of home buying restrictions.
Data released by the Guangzhou Association of Real Estate Agents reveals that since the introduction of relevant policies in late May, covering relaxations on home-buying restrictions, down payments and interest rates, the number of pre-owned home transactions in many districts has seen three consecutive weeks of growth.
"People with rigid demand to buy homes for marriage purposes are looking for properties that meet their requirements. The total price range is around 1.5 million yuan (about 206,400 U.S. dollars) to three million yuan (about 412,800 U.S. dollars), and homes around 90 square meters have become the most popular choice for many customers. Previously, these properties would be sold for over four million yuan (about 550,400 U.S. dollars), but now the owners will sell at around three million yuan," said Huang, a real estate agent. Data from the National Bureau of Statistics on June 17 shows that in May, second-hand housing prices in Guangzhou declined by 1.6 percent compared to the previous month. Guangzhou has experienced consecutive months of declining prices in the pre-owned housing market.
Incentives including lowered down payments and interest rate reductions have stimulated transaction activity, prompting prospective buyers who have been waiting for the best market timing for a long time to take action.
"We have viewed two properties for sale and waited for a long time before making decision. We eventually decided to buy when the price came down. The same house type is now hundreds of thousands of yuan cheaper," said Lin, a home buyer.
"I've noticed the declines in home prices and this home priced even lower than the market level, something around 10 percent or so," said Xian, another homebuyer.
Meanwhile, Nanjing witnessed a surge in second-hand housing transactions last week, and the sales surpassed 2,600 units, an increase of 26.8 percent compared to the previous week. The highest daily transaction volume exceeded 500 units, while the number of listings remained stable for six consecutive weeks.
Real estate agents said another advantage for home buyers who choose to buy at this moment is that the transaction cycle for second-hand homes is much shorter than in peak seasons.
"Previously, the average transaction cycle was about three to four months. Now, it's generally one to two months. In some cases, it can be as short as half a month," said Shao Mingshui, a manager of a real estate agency.
The first batch of cross-bank transactions for pre-owned homes of "home trade-in program" in Guangdong's Shenzhen City was implemented in eight banks on Thursday, according to the city's public housing fund center.
The entire process is facilitated by the fund center, which provides free fund supervision services. On average, this saves both buyers and sellers between 20,000 yuan (about 2,752.08 U.S. dollars) to 30,000 yuan (about 4128.12 U.S. dollars) in housing transaction costs.
To address the challenge of smooth transactions between buyers and sellers involving different lending banks, the fund center has introduced free fund supervision services for cross-bank transactions for pre-owned homes of "home trade-in program". This service allows sellers to complete property transfers without the need to repay their loans in advance, even when the loans are held by different banks.
Once the buyer and seller sign a tripartite agreement with the fund center, the down payment and newly disbursed loan funds from the buyer and buyer's bank are deposited into a fund supervision account provided by the center, free of charge. After the property transfer is completed, the fund center transfers the supervised funds to the seller's bank and the seller. Any interest generated during the fund supervision period is also allocated to the seller.
Chinese cities see recovery of second-hand home transactions following relaxation of restrictions
