Housing deals to resume in 2022 in China’s first-tier cities as buyers re-enter the fray with pent-up demand after four years of draconian controls

Transactions may return to China’s housing market in 2022, most noticeably in the country’s four first-tier tentpole cities, as relaxations in both monetary policy and market-dampening measures attract genuine buyers to re-enter the fray.

Median home prices in Beijing, Shanghai, Guangzhou and Shenzhen may rise by no more than 5 per cent – the level that triggers alarms about property bubbles, which sends policymakers into overdrive – in the new year, as financing pledged by monetary authorities help leveraged developers get their projects back on track, while genuine homebuyers get their mortgage loans.

“All eyes are on mortgage loans because it was the major stumbling block to home purchases by most buyers with genuine demand,” said Yin Ran, a Shanghai-based angel and property investor. “Many of them are seeing a ray of hope after the leadership decided to give economic stability their top priority in 2022.”

The prognosis is a welcomed breather from the relentless attempt to rein in runaway home prices that began in the autumn of 2017. Authorities introduced a raft of draconian measures that seeped into every aspect of the economy, from bank loans to capital-gains tax and even the divorce procedures of property-owing couples, to tamp down on speculation and tame prices.