Golden week: China’s property market sales get boost from Beijing’s stimulus measures

Strong sales in Shenzhen during the week-long holiday reflect the impact of recent wide-ranging stimulus measures rolled out by Beijing

Suddenly, cheers rang out after a lady smashed a “golden egg” – the typical way buyers celebrate their purchase of a new home – and then unboxed gifts from the developer. She was among some 30 homebuyers who snapped up flats on the third day of China’s “golden week” National Day holiday, when the developer pulled in about 300 million yuan (US$42.5 million) in total sales, according to Feng Yuanjin, a sales manager for the property on offer in the city’s Nanshan district.
“We had to extend our operating hours to 11pm at the latest, from the previous deadline of 7pm, to entertain as many customers these days,” Feng said, adding that their team welcomed 350 visitors on Thursday. The property mainly targeted families looking for a home upgrade, as the flats on offer cost an average of 70,000 yuan per square metre after discounts.

The municipal government of Beijing, the nation’s capital, on Monday followed suit and relaxed its restrictions for non-local residents to buy properties.

China’s most significant stimulus package since the pandemic represented the first time the country’s central bank had offered a combination of rate cuts, reserve requirement rate cuts and structural monetary policies at the same time, as officials seek to stimulate consumption, investment and property sales to achieve the nation’s economic target.
The People’s Bank of China had asked lenders to cut mortgage rates by half a point and reduce the down payment for second homes to 15 per cent from 25 per cent.
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Following that announcement, the Hang Seng Index rose 9.1 per cent last week, following a 13 per cent surge the previous week. That marked the biggest weekly rally in 26 years.

Since the policy package was announced, there has been a 23 per cent cumulative gain that restored US$3 trillion in market value to Chinese stocks in Hong Kong, Shanghai, Shenzhen and New York.

In Shenzhen, that turnaround not only lifted the confidence for regular homebuyers, but also that of the city’s richest people.