China could relax property curbs to boost residential market in the nine mainland cities in the Greater Bay Area, Cushman says

Beijing may unveil further relaxation measures that could help boost residential market transactions in the nine mainland cities in the Greater Bay Area, after volumes slumped in the second quarter, international property consultant Cushman & Wakefield said in a report.

Still that may not prevent a further decline in prices of homes in the secondary market as the post-pandemic caution continues to crimp demand.

“The three-year [pandemic] has reduced the government’s funding and the public’s willingness to spend money on properties, and the Central Bank’s briefing on July 14 mentioned that there was still room for optimising the policies previously proposed on the property market,” said Alva To, Cushman’s vice-president and head of consulting for Greater China. “Although we have not witnessed any stimulus policies for now, I think they will be introduced in the future.”

The consultancy sees secondary home prices falling by 5 per cent with Shenzhen, China’s Silicon Valley, seeing a bigger decline due to the latest round of lay-offs in the tech and finance sectors.

Prices of primary homes in Shenzhen fell 3.4 per cent compared to the beginning of this year, and are currently around 64,358 yuan per square metre. In contrast, prices of Guangzhou and Dongguan homes rose 16.7 per cent and 32.2 per cent respectively, driven by sales of new properties, Cushman’s report said.

This is a structural decline, said Samuel Kong, South China managing director of Midland Realty. He added that unless stimulus measures are introduced, the market will continue in a downward spiral for the second half of the year.