SHENZHEN’S FIRST-HAND RESIDENTIAL SALES MARKET HAS CHANGED AMID POLICY CURBS AND ECONOMIC SLOWDOWN OVER THE PAST THREE YEARS.

Shenzhen has enjoyed abundant policy incentives offered by the central government and strong GDP growth at a CAGR of 8.7% from 2014 to 2023. Meanwhile, Shenzhen’s permanent population grew by 4.2% per annum during the same period, reaching 17.8 million by the end of 2023. Not only have these generated a considerable amount of purchasing demand but also fueled the rapid development of the Shenzhen residential sales market and price growth. From 2014 to 2023, the average transaction price for Shenzhen’s first-hand residential sales soared by 191.6%, outpacing that of China’s 70 main medium to large cities.

SHENZHEN UNVEILED A SLEW OF MEASURES TO SUPPORT THE RESIDENTIAL PROPERTY SECTOR SINCE 2022.

As the market faced the triple pressures of economic slowdown, softening demand and weakening market expectations, both the central and local governments became more aware of the necessity of restoring market confidence and reversing the downturn in real estate sector development. Against this backdrop, more property stimulus measures were injected into the market. 

In terms of financing environment, the central bank published the 16-Point Plan in late 2022 to assist cash-strapped developers financially to ensure their projects are delivered and defuse further risks. Following this, the market-based benchmark lending rate was cut on 20 February 2024 and the average loan interest rate for first-time residential purchasers in Shenzhen was lowered from 4.10% to 3.85% in late February, the lowest in Apr 2024 history after the fifth reduction since 2022.