Mainland Chinese homebuyers are now coming back to the market with a new fervor after months of lockdowns and shelter-in-place orders. Industry experts have noted that the "revenge spending" on properties is the result of months of pent up demand across the region.
On Monday, hundreds of buyers had participated in the launching sale of a new luxury project in Shanghai. All of the property's 160 units were immediately sold out after buyers were drawn from a large pool of more than 500 interested applicants. Most of the participants had to stand in line last week to be registered to be part of the draw and all of them were required to make a 6 million yuan deposit for the chance to buy a unit in the luxury project.
The relatively steep prices of the units, which ranged from 17 million yuan or roughly $2.4 million to 78 million yuan, did not deter the would-be buyers. Analysts at the Hong Kong-based firm Centreline Property Agency stated that the demand was always there and buyers are now clamoring to get their hands on the new property after months of being wooed by developers through online viewings and promotions.
According to the company, the pent up demand could lift home sales further in the coming months. Centaline Property estimates that homes sales could reach more than 600,000 square meters for this month alone, double the amount recorded in March and close to four times the amount recorded in February.
Moody's Investors Service's Corporate Finance Group agrees with Centaline's assessment and stated that pent-up demand from the mass market during the first quarter has finally been released, resulting in the property sales increase.
The increase in demand can also be partly attributed to the supportive policies imposed by local governments to aid the property sector's recovery. In major cities such as Shanghai, Beijing, and Shenzhen, residential home sales have risen. In the week ending April 20, homes sales in the three cities rose by an average of 37 percent.
Data from the China Real Estate Information Corporation (CRIC) showed that a total of more than 1.3 million square meters were sold in China's tier 1 and tier 2 cities last week. Property sales numbers in lower-tiered cities are also expected to increase in the coming months as local governments roll out supportive measures to attract more homebuyers.
In the capital of China's autonomous Inner Mongolia region, the government has announced a new program that would allow new graduates from full-time universities to purchase homes within the city with a 50 percent discount.
