China's Property Market Sees Uptick During National Day Holiday

China's property market experienced a notable upturn during the recent National Day holiday, commonly known as Golden Week, which began on October 1, 2024. This positive trend follows a series of stimulus measures implemented by the government to revitalize the country's real estate sector, which has historically accounted for approximately 25-30% of China's GDP.

According to state broadcaster CCTV, citing the Ministry of Housing and Urban-Rural Development, the number of house visits, an indicator of purchasing intent, increased significantly during the seven-day holiday period. Sales of homes in various locations also rose to "varying degrees," suggesting a potential recovery in the market.

Over 50 cities across China have introduced policies aimed at boosting the real estate market. These measures include reductions in down-payment ratios and mortgage rates, which have been implemented throughout the year to support the property sector. Nearly 2,000 developments from more than 1,000 property companies participated in promotional activities during the holiday period, with most projects reporting a year-on-year increase in visits exceeding 50%.

In September 2024, several major cities announced significant policy changes to stimulate the property market. Guangzhou, the capital of Guangdong province, lifted all restrictions on home purchases. Meanwhile, Shanghai and Shenzhen eased limitations on housing acquisitions by non-local buyers and lowered the minimum down-payment ratio for first-time homebuyers to no less than 15%.

These localized efforts are part of a broader economic stimulus package, described as China's most substantial since the COVID-19 pandemic approximately four years ago. The government aims to address deflationary pressures and reinvigorate economic growth through these measures.

China's real estate sector has undergone significant transformations since the reintroduction of private homeownership in the late 1990s. The country's rapid urbanization, with the urban population increasing from 17.9% in 1978 to 64.7% in 2023, has been a key driver of property demand. However, challenges such as "ghost cities" with low occupancy rates and the phenomenon of "nail houses" resisting development have also emerged.

The property market's influence extends beyond housing, affecting social trends such as "naked marriages" where couples marry without owning a home, and the perception of "leftover women" - educated, urban women over 27 who remain unmarried, often due to high property prices.

As China continues to navigate its economic challenges, the property sector remains a crucial component of its growth strategy. The government's efforts to balance market stability with sustainable development are evident in initiatives like the green building standards introduced in 2006 and the property tax pilot program launched in Shanghai and Chongqing in 2011.

"The number of visits to most of the projects participating in the promotions increased by more than 50% year-on-year."

The recent uptick in property market activity during the National Day holiday suggests that these measures may be having a positive impact. However, the long-term effectiveness of these policies in addressing the broader economic challenges faced by the world's second-largest economy remains to be seen.