“Entry requirement for residential property purchasing in Guangzhou has reached a new low with 15% of lump sum downpayment. The favourable policy environment enticed some prospective purchasers to sign up Sale and Purchase Agreements with developers, marking up the quarterly transaction volume and average price of the Guangzhou residential sales market.”

CARLBY XIE, SAVILLS RESEARCH



Policy stimuli helped unleash some pent-up demand to the market during June 2024.

• On 17 May 2024, the central bank announced to lower the bar of downpayment, remove mortgage floor rates nationwide and lower housing provident loan interest rates. Following this, Guangzhou lowered the city’s downpayment thresholds to 15% for first-home buyers and 25% for second-home buyers.

• The average loan interest rates were reduced from 3.85% to 3.4% for first-time buyers and from 4.25% to 3.8% for secondhome buyers during the quarter.

• Prompted by policy stimuli, some potential purchasers took this opportunity to purchase target properties, reflected by a pick-up in monthly transaction volume citywide during June.

• Guangzhou’s first-hand residential supply increased by 20.0% QoQ to 1.03 million sqm and the transaction volume of the Guangzhou first-hand residential property sales market increased by 55.1% QoQ to 1.54 million sqm by the end of Q2/2024.

• The average sales price of the Guangzhou first-hand residential market increased by 3.2% QoQ to RMB46,890 per sqm as of end-Q2/2024.

• Both central and local governments are expected to launch more incentives to further stimulate land and first-hand residential sales.