On June 13th, the city of Guangzhou issued a notice declaring the complete cancellation of restrictions on the housing market, including purchase limits, sales restrictions, and price restrictions, while also lowering the down payment ratio and interest rates on loans. This makes Guangzhou the first tier-one city in China to abolish the “three restrictions” and marks the end of 15 years of housing market control in the city.
This announcement was made public by the Guangzhou Municipal Bureau of Commerce, which released the “Notice on Soliciting Opinions on the Implementation Plan for Boosting Consumption in Guangzhou (Draft for Soliciting Opinions).” As reported by the Daily Economic News on June 15th, the plan explicitly proposes the comprehensive elimination of purchase limits, sales restrictions, and price controls in the housing market, as well as the reduction of down payment ratios and interest rates. This move positions Guangzhou as the first city among the tier-one cities (Beijing, Shanghai, Guangzhou, Shenzhen) to completely abolish the “three restrictions” all at once, while also lowering down payment ratios and interest rates to stimulate the housing market.
The decision to fully lift housing market controls in Guangzhou is believed to be mainly due to the high levels of commercial housing inventory and extended turnover periods in the city. According to data from the Guangzhou Central Plains Research Institute’s Development Department, as of the end of May this year, the average turnover period for housing inventory citywide was 23 months, with the longest turnover period in the Yuexiu District at 38 months.
Monitoring by E-House Research shows that due to the record high levels of housing land supply and demand in Guangzhou in 2024, as these plots continue to enter the market without the full release of purchasing power, the inventory scale and turnover period of commercial housing in Guangzhou remain high.
Moreover, from an overall perspective, there is still differentiation between the core area and the outskirts of Guangzhou. Data from Anjuke shows that as of June 14th, the average price of new homes in Guangzhou was 35,700 yuan per square meter. In particular, the average prices for new homes in Tianhe and Yuexiu were 78,000 yuan per square meter and 108,000 yuan per square meter, respectively, while the prices in Zengcheng and Huadu were only 16,900 yuan per square meter and 18,000 yuan per square meter.
The turnover period refers to the sales cycle of commercial housing. In the real estate sector, “turnover” refers to sales, and the turnover period of newly built commercial housing is generally calculated by dividing the stock of newly built commercial housing by the average monthly transaction volume over the previous 12 months.
In the industry’s view, a turnover period between 12 to 18 months is considered healthy, while surpassing 36 months raises red flags, indicating that properties are not selling.
The 15-year control journey of the Guangzhou housing market began in October 2010, with measures including city residents who already own one property being restricted to buying only one more, non-local residents with less than 1 year of continuous social security records within 2 years not being able to purchase a property, and residents who own more than two properties being prohibited from buying additional properties.