**Chinese Property Market Sees Boost as Cities Ease Restrictions**
In a bid to stimulate homebuyer sentiment, major cities in mainland China have announced measures to relax property purchase restrictions. The move follows the central bank’s recent policy stimulus and is expected to give a much-needed boost to the country’s struggling real estate sector.
Guangzhou, Shanghai, and Shenzhen are among the cities that have eased restrictions, with some removing limits on home purchases altogether. The changes are aimed at encouraging more people to buy homes, particularly in first-tier cities like Beijing, Shanghai, and Guangzhou.
The news sent shares of Chinese property developers soaring, with the Hang Seng Mainland Properties Index surging 8.36% on Monday. Hong Kong-listed shares of real estate developers such as Longfor Group Holdings, Hang Lung Properties, and China Resources Land saw significant gains, ranging from 3.58% to 19.1%.
The easing of purchase restrictions is seen as a positive step towards stabilizing the property market, which has been in a multi-year downturn since 2020. However, experts caution that the impact may be limited in smaller cities, where inventory levels are higher.
The Chinese government has been taking steps to support the real estate sector, including reducing interest rates on individual mortgages and lowering down-payment ratios for second-home purchases. While these measures have not yet led to a significant turnaround, policymakers remain committed to shoring up the sector and reducing household financial burdens.
To restore confidence among potential homebuyers, experts suggest that the government needs to accelerate efforts to complete stalled or abandoned construction projects and introduce swift fiscal policies to stimulate domestic consumption. With the right measures in place, homebuyer demand is expected to slowly bottom out, and mortgage loan growth is likely to stop contracting soon. However, a sharp overall rebound in the property market may take longer to materialize.
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