Across China’s first-tier cities, the property market shows positive signs of recovery. New home sales are holding steady, and second-hand transactions are rising, reflecting the government’s stabilising measures and increased market confidence.
Since the start of 2024, local governments nationwide have introduced a range of policies aimed at stabilising the property market. These include easing home purchase restrictions, lowering taxes on property trade-ins, and setting higher standards for the construction of "quality housing." These moves have started to pay off, with more activity in property sales and faster deal closures.
In Beijing, new home sales surged 125.6% in March compared to the previous month, while second-hand home transactions increased by 61.4%. Shenzhen also saw impressive figures, with new home sales up 75.1% year-on-year from January to April, alongside a 55% increase in second-hand home sales.
Nationally, data from the National Bureau of Statistics shows that 24 of China’s 70 major cities saw month-on-month increases in new home prices in March, up from just 18 in February. Second-hand home prices also grew in 10 cities, suggesting that the luxury market is thriving, particularly in first-tier cities like Beijing and Shanghai.
The land market, often a barometer for real estate health, also reflects growing stability. In the first quarter of 2024, major cities like Beijing, Shanghai, and Hangzhou saw several land deals surpassing 5 billion yuan (approximately £693 million), with some properties commanding land premiums of over 100%. Nationwide, the average land premium rate in key cities surpassed 10% for the first time in over three years, signalling renewed investor confidence.
According to experts, these signs of stability are a result of fine-tuned policies designed to unlock housing demand and improve market liquidity. The government's efforts have not only addressed housing demand but also provided incentives for upgrading older properties and boosting the supply of affordable housing.
While the market shows signs of stabilisation in major cities, challenges persist in third- and fourth-tier cities, where slower inventory turnover continues to drag on the market. To alleviate this imbalance, local governments have introduced measures to repurpose unsold commercial properties into affordable housing.
In Zhengzhou, for instance, unsold commercial homes are being converted into "talent apartments" for young professionals. These 40-square-metre units, which are fully furnished and have shared amenities such as gyms and recreational spaces, are a hit among young residents. So far, the programme has launched 37 projects, providing over 56,000 housing units to young professionals, with plans to expand further by 2026.
Across the country, more than 10 cities have adopted similar initiatives, converting surplus housing stock into homes for new urban residents and younger generations and addressing housing affordability issues in growing cities.
While the property market recovers, there is an ongoing shift towards higher-quality housing. Demand for spacious, green, and well-designed homes remains strong, and this trend is set to intensify with the introduction of new national housing standards. From May 2024, stricter regulations will apply to ceiling height, elevator access, and sound insulation in new residential projects. These changes aim to raise the living standard and provide a more transparent framework for constructing homes that meet evolving buyer expectations.
In Beijing, one such project is currently under construction, which was inspired by China’s "Good Housing" design competition. The development will feature a mix of spacious apartments, shared amenities like gyms and co-working spaces, and flexible layouts designed to meet the needs of modern families. The aim is to create homes that are both functional and sustainable, reflecting the country’s growing focus on quality over quantity in the housing market.
As new projects take shape, the focus will also be on upgrading older properties. Experts suggest that urban renewal will play a key role in improving the quality of life for residents in established neighbourhoods, enhancing both public facilities and living conditions.
While China’s property market is certainly in a phase of recovery, the road ahead will involve navigating significant challenges, particularly in smaller cities and the wider push towards affordable housing. Nevertheless, the combination of government support, strategic market adjustments, and a focus on quality housing is laying the groundwork for a more stable and sustainable real estate environment in the future.
