Subhechcha Ganguly 
China’s residential property sales saw an increase in October, marking the first year-on-year rise of 2024, driven by the government’s latest stimulus efforts that rekindled buyer interest. The value of new home sales among the 100 largest real estate companies rose by 7.1% compared to the previous year, totaling 435.5 billion yuan ($61.2 billion), recovering from a significant 37.7% decline in September, according to preliminary data from China Real Estate Information Corp. Sales also surged 73% compared to the previous month. This uptick followed the introduction of the country’s most comprehensive stimulus measures, which included cutting borrowing costs for existing mortgages, easing purchasing restrictions in major cities, and lowering down payment requirements. Additionally, home sales increased during the week-long National Day celebrations as developers offered more promotions.
The residential market showed increased activity in October as homebuyers regained some confidence, according to Chen Wenjing, research director at China Index Holdings. However, she emphasized that further efforts are necessary to reverse the sector’s ongoing decline. Analysts are anticipating additional policy support to help achieve China’s economic growth target of approximately 5% this year, a goal President Xi Jinping reiterated ahead of an important legislative meeting next week.
International Monetary Fund Director Kristalina Georgieva cautioned that without reforms to boost domestic consumption, China’s annual growth could fall to “way below” 4% in the future. A prolonged downturn in the property market has resulted in significant losses in household wealth, contributing to ongoing deflationary pressures.
In late September, Guangzhou became the first tier-1 city to lift all restrictions on residential property purchases. Meanwhile, other major cities like Beijing, Shanghai, and Shenzhen have eased regulations, allowing more individuals to buy homes in suburban areas and enabling some to purchase additional properties. The People’s Bank of China has also approved the refinancing of up to $5.3 trillion in existing mortgages for millions of families.
Cash-strapped developers are relying on a revival in sales to reassure their creditors. China Vanke Co. reported another significant loss in the third quarter, with contract sales declining by 35% in the first nine months compared to the same period last year. Similarly, Country Garden Holdings Co. received bondholder approval to extend its onshore bond payments after struggling to raise sufficient funds.
In a separate move, China’s central bank injected $70 billion into money markets this month using a new policy tool aimed at alleviating liquidity pressures in the struggling economy and encouraging banks to increase lending.
