The great resurgence: Chinese homebuyers bounce back as real estate takes off

Chinese real estate is back with a bang and property investors are rejoicing as homebuyers return to the market

The market is expected to continue growing in the coming months, with a particular focus on high-quality properties in prime locations. Govanz/Shutterstock

After a significant slump in Chinese real estate, the sector has shown signs of recovery. According to CNBC, homebuyers are starting to return to the market, eager to take advantage of the favourable conditions. 

One major factor contributing to the recovery is the support from the central bank. The People’s Bank of China (PBOC) has been propping up the housing market through a series of measures, including lowering interest rates and relaxing lending restrictions, giving homebuyers more confidence to invest in the market. 

When asked how these homebuyers are adapting to the changing regulatory environment and market conditions, Ken Ip, the chairman at Asia MarTech Society and a judge of the PropertyGuru Asia Property Awards Mainland China, answered: “Chinese homebuyers are responding to the changing regulatory environment and market conditions in various ways. They are looking for more affordable and stable housing options, such as smaller apartments or homes in suburban areas, and turning to alternative financing options. Moreover, Chinese homebuyers are increasingly seeking overseas investment opportunities, particularly in countries with relaxed property regulations and favourable market conditions.” 

He added that recent measures by the government aimed at stabilising the country’s property market and providing more financing support to property firms may provide some respite to homebuyers facing challenges in the real estate sector.  

Since the said measures are starting to take effect, Bloomberg reported that cities across China have implemented steps to increase the housing supply, such as easing restrictions on land purchases and offering subsidies to developers. 

Among the Chinese developers and industry players that have seized these measures are the major titleholders from the recent PropertyGuru Asia Property Awards Grand Final 2022, including New World Development Company Limited, Best Developer (Asia); Lead8 & New World Development Company Limited, Best Mega Mixed Use Development (Asia) for 11 SKIES; Benoy Limited, Best Mixed Use Architectural Design (Asia) for CRL MixC Qianhai; and Lead8, Best Retail Architectural Design (Asia) for Shougang Park Urban Weaving District. 

Yet, despite the positive signs, some experts remain wary about the market’s prospects. The Council on Foreign Relations is cautious that the housing market still remains vulnerable to risks, taking into account a potential slowdown in economic growth and a surge in non-performing loans. 

Ken agreed that “the long-term outlook for the market remains uncertain, with homebuyers also reportedly adapting cautiously to changes in the real estate sector and basing decisions on their individual needs and expectations.” 

Related: Spluttering dragon: Crisis builds in China, yet shafts of light remain

Nevertheless, there is optimism that the recovery will continue. The Global Times revealed that the market is expected to continue growing in the coming months, with a particular focus on high-quality properties in prime locations and the growing demand for rental properties. 

As young professionals and millennials flock to cities for work, there is a rising need for affordable rental properties. The rental market has already seen a surge in demand, with rental yields in major cities reaching record highs. 

The recovery of China’s housing market is a positive sign for the country’s economy. As one of the largest and most influential markets in the world, China’s real estate industry has a significant impact on global economic growth. With the PBOC’s support and government policies aimed at stabilising the market, there are hopes that the market will continue to thrive in the coming months. 

Heard of award-worthy residential, commercial, or industrial projects in the Chinese territories? Nominate them for the 10th annual PropertyGuru Asia Property Awards (Mainland China, Hong Kong, Macau) on or before 15 September 2023.  

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].