(Yicai) July 3 -- Pre-owned home sales in Beijing and Shanghai surged last month thanks to the relaxation of the cities’ housing policies, reaching new highs.

Nearly 15,000 second-hand apartments were sold online in Beijing in June, up 12 percent from May and 29 percent from a year earlier, the highest since March last year, according to data from the Beijing Municipal Commission of Housing and Urban-Rural Development.

On June 26, Beijing cut the downpayment floor to a minimum of 20 percent from 30 percent for first-time home buyers, and to 35 percent for second homes within the Fifth Ring Road and 30 percent for those beyond. The city also lowered the minimum mortgage rate for both first- and second-time homebuyers.

Thanks to the introduction of the new measures, some 3,232 pre-owned homes were sold in Beijing between June 27 and June 30. But the market had already started recovering in late May on expectations for the easing of housing policies, according to industry insiders.

In June, second-hand home prices in Beijing fell 0.9 percent from the previous month and 6.4 percent from a year earlier, data from the China Index Academy showed.

There are more than 160,000 pre-owned homes for sale in Beijing, compared with 80,000 to 100,000 on average before 2022, Guo Yi, chief analyst at real estate service provider United Harvest, told Yicai.

Beijing’s second-hand housing market has temporarily stabilized but entered a tug-of-war stage between buyers and sellers for prices, Guo noted, adding that only when the number of listed pre-owned homes returns to about 100,000 units, the market’s overall supply and demand dynamics can change, and prices can rebound.

Shanghai

Some 26,374 second-hand homes were sold in Shanghai in June, up 41 percent from May, according to the Shanghai Real Estate Trading Center. Data from Chinese real estate data provider Anjuke showed that June’s pre-owned house sales were the highest in three years.

On May 27, Shanghai became the first Chinese first-tier city to pare mortgage rates in the wake of the People’s Bank of China policy easing, cutting the minimum rate for first-time buyers to 3.5 percent from 3.85 percent and that on second homes to 3.9 percent from 4.25 percent. It also trimmed the downpayment on first and second homes to 20 percent and 35 percent from 30 percent and 50 percent, respectively.

Shanghai’s eased housing policies cover almost all areas of the property market, helping to release rigid demand and housing upgrading needs, according to a report from the local branch of real estate agency Centaline Property. Therefore, it is unlikely that the city will introduce further policies in the second half of the year.

The outstanding performance of Shanghai’s pre-owned home market in June was directly related to the new housing policies, said Lu Wenxi, an analyst at Centaline Property Shanghai. These policies had the biggest impact in the past six months, with an overall effect better than previous ones.

Second-hand home prices have not changed much in Shanghai despite the increase in sales, according to a real estate agent. Some homeowners did try to raise prices after the new policies, but they were unable to sell.

Guangzhou, Shenzhen

Guangzhou and Shenzhen, China’s two other first-tier cities together with Beijing and Shanghai, also saw their second-hand housing market recover to some extent after easing their housing policies.

Pre-owned home sales in Guangzhou soared more than 33 percent to 10,456 units between May 26 and June 25 from a month earlier, a new monthly record since April last year, according to statistics from the Guangzhou Association of Real Estate Agents.

There is no official data for Shenzhen’s second-hand home sales in June, but according to the local real estate market association, 1,362 pre-owned homes were sold in the city in the 25th week of the year between June 17 and June 23, up for the third consecutive week.

On May 28, Guangzhou became the first first-tier city to remove the mortgage rate floor, while Shenzhen lowered it on first and second home loans to 3.5 percent and 3.9 percent from 3.85 percent and 4.25 percent.

The pair also dropped the minimum downpayment, with Guangzhou cutting it to 15 percent from 20 percent for first-time buyers and to 25 percent from 30 percent for second-home buyers. Shenzhen trimmed both by 10 percentage points to 20 percent and 30 percent, respectively.

Editor: Futura Costaglione