• China's real estate market has seen a surge in home sales due to government stimulus measures.
• Over 50 cities introduced policies to boost the market, resulting in a 50% increase in project visits.
• Major cities like Shanghai and Shenzhen eased restrictions on housing purchases, boosting market confidence.
• Despite the positive impact, experts suggest these measures may not fully reverse ongoing economic challenges.

China's real estate market, a significant pillar of the country's economy, has experienced a surge in home sales during the National Day holiday. This increase is a direct result of a series of property stimulus measures introduced by the Chinese government since late September. The measures, which include reductions in down-payment ratios and mortgage rates, were designed to support the property sector, which previously accounted for one-quarter of the country's economic activity.

The week-long holiday period saw a significant increase in the number of house visits, reflecting a willingness to buy a home. Sales of homes in many places rose to varying degrees, according to state broadcaster CCTV. More than 50 cities introduced policies to boost the real estate market, with nearly 2,000 developments from over 1,000 property companies participating in promotions.

The number of visits to most of the projects participating in the promotions increased by more than 50% year-on-year. This indicates that the stimulus measures have been effective in attracting potential buyers and investors to the property market.

Stimulus Measures Boosting Market Confidence

In the southern Chinese city of Shenzhen, many real estate sales offices worked through the night to attract home-buyers. Transaction volumes and the number of viewers to properties increased significantly, the 21st Century Business Herald reported. Some buyers even drove long distances to see homes, demonstrating the heightened interest in the property market.

Last month, Guangzhou city in southern Guangdong province announced the lifting of all restrictions on home purchases. Shanghai and Shenzhen also eased restrictions on housing purchases by non-local buyers and lowered the minimum down-payment ratio for first home buyers to no less than 15%. These measures came days after China unveiled its biggest stimulus since the COVID-19 pandemic in a bid to pull the economy out of a deflationary funk.

The stimulus measures and the subsequent rise in home sales have had a positive impact on sentiment and confidence in China's real estate market. The increase in sales during the National Day holiday, along with policy relaxations in major cities, signals to buyers and investors that the government is committed to supporting the sector.

Challenges Ahead for China's Economy

However, experts suggest that while these measures provide a short-term boost, they may not be enough to fully reverse the ongoing economic challenges or meet ambitious growth targets. The measures reflect the pressing challenges facing China, including a struggling property market, and declining global demand. While they signal a proactive shift, they will not be sufficient on their own to counter deeper economic issues that persist.

Historically, China has faced similar economic challenges, particularly in the real estate sector. In the past, the government has implemented various measures to stimulate the economy and the property market. For instance, during the 2008 global financial crisis, China launched a massive stimulus package to boost its economy, including measures to support the real estate sector. These measures helped China recover relatively quickly from the crisis. However, they also led to a rapid increase in property prices, leading to concerns about a property bubble.