"Silver October" property market: The year-on-year growth rate of second-hand housing transaction volume has expanded.

Since October, transactions in the secondary housing market have remained active, while the new home market is still in a period of adjustment. According to monitoring data from the China Index Academy, the number of second-hand residential units sold in 20 key cities increased by 20% year-on-year in October (1st-28th), while the transaction area of newly built commercial residential buildings in 30 key cities decreased by 13% year-on-year. The secondary housing markets in Beijing, Shanghai and some second-tier cities continue to maintain high activity. In the new home market, transactions in Beijing have grown driven by the large supply in the early stage, and high-quality projects in core areas of some cities are selling well, but most cities still see a year-on-year decline.

Looking ahead to the end of the year, the housing loan interest discount policy will help reduce the interest burden of eligible home buyers and support the release of owner-occupancy demand; combined with the promotional activities launched by real estate enterprises at the end of the year, it is expected to provide certain support for market transactions. The active transactions of second-hand housing will also help home replacement families recover funds, creating conditions for the release of improved housing demand. High-quality projects in core cities are expected to maintain a good de-stocking performance, and the new home market as a whole is still in a gradual repair process.

Secondary Housing Market: Transaction Resilience Continues, Maintaining Year-on-Year Growth

Chart: Weekly Transaction Volume of Second-hand Housing and Its Year-on-Year Trend in 20 Key Cities

On September 29, three departments including the Ministry of Finance issued the Notice on Implementing the Interest Discount Policy for Residents' Housing Purchase Loans. Starting from October 1, families who purchase their first home with newly issued commercial personal housing loans, with a construction area of no more than 120 square meters and a total price of no more than 1.5 million yuan, will be given an annual interest discount of 1 percentage point, and both new homes and second-hand homes are within the scope of the policy. In terms of housing source characteristics, the choices of second-hand housing in terms of area and total price are relatively abundant, and the coverage of housing sources that meet the interest discount conditions is wider than that of new homes, so the potential reach space of the policy for the first-home purchase demand in the secondary housing market is relatively larger.

According to data from the China Index Academy, in October (1st-28th), the number of second-hand residential units sold in 20 key cities increased by 20% year-on-year, and the growth rate expanded compared with the previous month. In cumulative terms, from January to October (1st Jan to 28th Oct), 1.22 million second-hand residential units were traded in the 20 key cities, representing a year-on-year increase of 7.5%.

By city, from October 1st to 28th, 11,000 and 21,000 second-hand residential units were traded in Beijing and Shanghai respectively, with year-on-year increases of 9% and 32% respectively; Suzhou and Ningbo saw growth rates exceeding 30%, while Hangzhou, Qingdao, Nanjing, Wuxi and Wenzhou recorded growth rates over 20%. The transactions of second-hand residential properties in many third- and fourth-tier cities also maintained rapid year-on-year growth.

New Home Market: Transactions in Most Cities Still Decline Year-on-Year, High-Quality Projects Maintain Certain Popularity

According to data from the China Index Academy, in October (1st-28th), the transaction area of newly built commercial residential buildings in 30 key cities decreased by 13% year-on-year. Compared with second-hand housing, the supply of new homes is more concentrated in improved-type products, and the number of housing sources that meet the area and total price requirements of the interest discount policy in some cities is relatively limited, so the driving effect of the policy varies across different cities and different projects.

By city, driven by the large supply in September, Beijing recorded a 28% year-on-year increase in the transaction area of newly built commercial residential buildings from October 1st to 28th, while Shanghai, Guangzhou and Shenzhen saw year-on-year declines of 1%, 6% and 8% respectively. Among second-tier cities, Jinan, Nanjing and Xining recorded year-on-year growth of more than 10% due to the low base figure last year, while most other cities still posted a year-on-year decline.

In terms of supply, from October 1st to 28th, the area of newly built commercial residential buildings approved for pre-sale in 30 key cities continued to decline year-on-year, and only a few key cities such as Beijing saw obvious year-on-year growth. The reduction in previous land transactions and new construction starts has constrained the scale of currently available projects for sale, and the reduction in new supply in some cities has also affected the release of sales demand.

Table: Some Hot-selling Projects in Key Cities Recently

Judging from the performance of recent hot-selling new residential properties, the demand is mainly concentrated in projects with mature supporting facilities, high-quality improved products and reasonable pricing. The supporting facilities for education, commerce and transportation in core areas and mature sectors are relatively complete, which are still attractive to owner-occupier home buyers; product designs such as open-air terraces, sky courtyards and integrated LDKB social spaces have increased the actual usable space, providing new choices for families looking to upgrade their housing. Some projects use real-scene demonstration areas and quasi-completed housing displays to allow home buyers to intuitively understand the product and delivery standards, reducing their concerns about purchasing properties.

This article is from the WeChat Official Account "China Index Academy", author: China Index Research, published with authorization by 36Kr.