Property market may still need policy easing
China's housing market shows tentative recovery signals, but a sustained rebound still requires continued policy easing, according to analysts. Further interest rate reductions and removal of purchase restrictions are suggested to stimulate upgrade demand and extend the recovery.
China's housing market has shown signs of recovery, but analysts warn that a sustained rebound depends on continued policy easing. The National Bureau of Statistics reported a 0.4% monthly increase in secondhand home prices in first-tier cities in March. Zhang Yu, a real estate analyst at China International Capital Corp, noted that listings in Beijing and Shanghai have declined while transaction volumes have stabilized, indicating a shortening absorption cycle. Most transactions were in homes priced below 3 million yuan, indicating demand is skewed towards first-time buyers. Analysts suggest further easing home purchase restrictions, lowering mortgage rates, and facilitating mortgage transfers to stimulate upgrade demand. Zhang Bin, a nonresident senior research fellow, emphasized the need for broader efforts to address insufficient domestic demand and foster inflation recovery, with further interest rate cuts being a key policy lever to stabilize property prices.
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