On October 30th, according to Caijing News (Reporter: Li Jie), it has been over a month since the 'stabilizing the market and preventing further declines' proposed at the end of the September political bureau meeting. The housing market in first-tier cities is heating up with a clear trend of stabilizing instead of falling. Industry experts believe that overall, Guangzhou and Shenzhen are performing better than Peking and Shanghai.

According to monitoring data from the China Index Institute, since October (10.1-10.27), the transaction volume of new homes in Guangzhou has increased by 108%, Shenzhen by 96%, Peking by 48%, Shanghai by 29%. The transaction volume of new homes in Guangzhou and Shenzhen has basically doubled, with a relatively smaller increase in Peking and Shanghai.

In the second-hand housing market, since October (10.1-10.27), the number of transactions for second-hand houses in Shenzhen increased by 63%, Shanghai by 55%, Peking by 16%.

"Looking at the transaction data up to the present time from first-tier cities in October, the market activity in Guangzhou and Shenzhen is significantly better than in Peking and Shanghai." Xu Yuejin, Deputy Director of Research at the China Index Research Institute, told reporters that the differences in the recovery of first-tier city markets mainly stem from varying degrees of policy relaxation.

Furthermore, it was stated that the policy relaxation in Guangzhou and Shenzhen is greater, with Guangzhou completely lifting purchase restrictions; while Peking and Shanghai have relatively smaller policy relaxation, with expectations and room for further relaxation of purchase restrictions, loan restrictions, and other restrictive policies in the future.

At the end of September, Peking, Shanghai, Shenzhen, and Guangzhou significantly eased real estate regulations. Among them, Guangzhou completely lifted purchase restrictions; Shenzhen implemented a '3 changes for 1 social security' policy in the core area, no social security required in non-core areas, reduced down payment percentages, changed the turnover tax period from 5 years to 2 years; Shanghai modified the purchase restriction scope in the outer ring, '3 changes for 1 social security', '5 changes for 2 turnover tax', and removed restrictions on non-ordinary residential properties; non-Beijing households in Peking reduced social security years to 3 years within the fifth ring, and 2 years outside the fifth ring, reduced minimum down payment percentages for personal housing loans, and eliminated standard distinctions between ordinary and non-ordinary residential properties.

Driven by policy improvements, overall, new and second-hand home transactions in first-tier cities have significantly increased in October.

According to the data from E-House Research Institute, it is expected that the transaction area of new commodity residences in first-tier cities in October will be 2.27 million square meters, an increase of 40% month-on-month and 2% year-on-year; while the month-on-month and year-on-year growth rates of new housing transactions in first-tier cities in September were -11% and -30% respectively, indicating an improvement in the transaction indicators in October.

"Considering the time difference between subscription and signing, it is expected that the in-transit transactions in October will be fully reflected in the signing system in November. Preliminary forecasts indicate that the year-on-year growth rate of new housing transaction area in first-tier cities in November may exceed 30%, showing a positive trend in market recovery." as pointed out by analysts from E-House Research Institute.

As for the second-hand housing sector, it is expected that the number of second-hand residential transactions in first-tier cities in October will be 57,260 units, with a month-on-month increase of 49% and a year-on-year increase of 57%.

"Excluding the abnormal values ​​in March 2023, the number of second-hand residential transactions in first-tier cities in October this year will reach the best monthly level since the second half of 2021, indicating an improvement in the trend of continuous cooling of second-hand housing transactions since the second half of 2021," said the above-mentioned analyst.

In terms of cities, all four first-tier cities are showing a positive growth trend in both month-on-month and year-on-year comparisons, with significant increases. Taking Shanghai and Shenzhen as examples, the estimated month-on-month and year-on-year transaction volume growth indicators for Shanghai in October are 85% and 81%, significantly exceeding the 'red line'; while Shenzhen's indicators are 86% and 123%.

Industry insiders believe that the performance of the new and second-hand housing markets in first-tier cities will play a positive role in improving property sales for real estate companies.

"It is expected that the sales performance of key real estate companies in October will increase by over 40% compared to September, with some sales performance growth rates exceeding 50%. The improvement in sales data will significantly improve the financial situation of real estate companies and also help them in subsequent business development, debt disposal, and land investment activities," stated the aforementioned analyst.