Before the “May Day” holiday, Chengdu cancelled its property purchase restrictions, but some developers mentioned that in comparison to policies, real estate enterprises are now in greater need of financial support.
On April 28th, the Office of the Leading Group for the Stable and Healthy Development of the Real Estate Market in the Communist Party of Chengdu issued a notice titled “Notice on Further Optimizing Policy Measures for the Stable and Healthy Development of the Real Estate Market,” stating that there will no longer be reviewing of household registration, social security, and other conditions for housing transactions within the city. The purchase limit on the number of units has also been removed.
Following the announcement of the policy, developers have intensified promotional efforts to attract homebuyers. Some properties have been offered at discounted prices, while others have introduced special offers and discounts.
As a result of various promotions, during the “May Day” holiday, the number of visits to real estate projects in Chengdu increased significantly compared to before the holiday. Statistics from the China Index Research Institute also indicate that during the “May Day” holiday, the number of house hunters in Chengdu increased, with visits to sales offices of some improved projects rising by 30% to 40%.
However, Kelperi Sichuan’s analysis suggests that the real estate market’s activity during this year’s “May Day” period is lower than last year. While visits to over half of the projects saw an increase, actual purchases slightly rose with increased difficulty in conversion. Some individual properties have shown strong sales performance, attributed not solely to the lifting of purchase restrictions but also to intensified marketing efforts by the projects. The market’s sustainability still requires further observation.
Some developers interviewed by “First Financial” stated that in the past, homebuyers were mainly driven by confidence in rising house prices and market conditions. Demand far exceeded self-use, but current demand is mainly from those seeking properties for self-occupation. Hence, the demand volume is much smaller now. Influenced by factors such as income and market conditions, the conversion rate is low, and sales are gradually weakening.
Developers express that current market confidence is insufficient. Operating as a developer is challenging, facing significant cash flow difficulties with many gaps to be filled. Therefore, in comparison to the removal of purchase restrictions, developers are in more urgent need of financial support.
Data shows that Chengdu’s real estate situation this year is markedly different from last year. Compared to the same period in March last year, Chengdu’s new home transaction volume has decreased by 6,525 units, a 41.9% drop; while second-hand home transactions have decreased by 9,415 units, a 33.4% decline. Meanwhile, this year, Chengdu’s second-hand housing market has witnessed a wave of price reductions, extending beyond old neighborhoods to include high-end residential properties and popular developments, leading to an overall price drop of around 10%.
The downward trend in the market has also impacted the overall development of the real estate industry, with key statistical indicators for real estate development in Chengdu experiencing significant declines. The Chengdu Statistical Bureau reported that from January to March, real estate investment in Chengdu decreased by 12.9%, new construction area of commercial buildings decreased by 29.1%, and sales area of commercial buildings dropped by 30.7%. These three major indicators all recorded double-digit declines, exerting a considerable influence on economic growth.