China experienced a sharp increase in new home sales in March, with supportive policies driving a resurgence in demand across 14 cities surveyed, according to a private survey released on Monday.
China Index Academy, one of the nation's largest independent real estate researchers, reported that new home sales increased 55.7% month-on-month, up from a growth of 31.9% in February.
Tier-one cities, such as Beijing and Shanghai, saw the fastest growth, with sales surging 73% in March. Meanwhile, tier-two and tier-three cities experienced sales growth of 54.7% and 28.6%, respectively. The positive data offers encouragement for the sector, which has faced several crises since mid-2021, including developer debt defaults and halted construction of pre-sold housing projects.
Chinese policymakers introduced a comprehensive bailout package at the end of last year, aimed at driving sales and facilitating project completions, which has helped to improve sentiment in the industry. Real estate developers saw gains of 2.4% on Monday.
The sector has also witnessed a gradual recovery in recent weeks, as homebuyers re-enter the market following Beijing's abandonment of its stringent "zero-COVID" policy in December. Local governments have also continued to ease property restrictions or implement stimulus policies to boost buyer sentiment. For instance, the southeastern city of Xiamen relaxed home-buying restrictions, allowing more residents to purchase properties.
A separate survey conducted by the China Index Academy revealed that new home prices in 100 Chinese cities increased at the fastest rate in nine months in March. The recent uptick in sales and prices indicates that the Chinese real estate sector is beginning to recover from the challenges it faced in 2021, with support policies and relaxed restrictions playing a crucial role in driving this growth.
