Ibuprofen over property: prospective homebuyers in Beijing defer purchases amid Covid-19 outbreak
- Prospective buyers are putting off property viewings because of a fear of contracting Covid, agents say
- Sales of lived-in homes in Beijing dropped 3 per cent last week, according to Zhuge Zhaofang
A homebuying recovery in Beijing has been replaced by a run on ibuprofen, aspirin and self-testing kits.
As the fast-spreading coronavirus outbreak dampens sentiment, sales are expected to take some time to return to pre-Covid-19 levels in China’s capital, analysts said.
“We have clients looking [for a home], but they do not want to view homes now,” said Mary Liu, a property agent in Beijing, noting that prospective buyers have been putting off viewings because of a fear of contracting Covid-19 amid a surge in coronavirus infections.
Liu and other agents are meeting fewer homeseekers this month as they choose to stay home instead.
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The Omicron variant has swept across the country, including Beijing, since the government relaxed its pandemic control measures on December 7. Many were left unprepared for the sudden reopening. Hospitals are packed with patients while streets and offices remain empty in the capital.
Renee Wang, a teacher in Beijing, is biding her time to go house hunting. She and her family have been looking to buy a second home for some time, but the sudden Covid-19 outbreak is making it difficult.
“We are thinking of buying a flat, not for living but for the school network in [a desired] district,” she said.
To deter speculation, residents in Beijing are limited to owning two homes per household. However, families with children do everything they can to own a second home in a neighbourhood with a good school network, as this is the only way to be eligible to apply for schools in that district.
Houses in Beijing’s top school district lose allure with young parents
Beijing is considered to have some of the best educational institutions in the country, with Haidian and Shunyi districts boasting of many reputed local and international schools.
“Whether there is Covid-19 or not, I still have this need,” said Wang. “The current outbreak means that we have a shorter time to decide on which one to buy. The seller may be in quarantine and I only have a limited time to go and check out these options.”
Homeseekers are delaying their buying plans for now, said Sophia Zhang, founder of property consultant Elong Investment Management in Beijing. “Now everyone is only thinking about how to survive the outbreak; they have no energy left for anything else,” she added.
She said that the uncertain economic outlook and job fears have deterred people from swapping their homes for a bigger one to avoid unnecessary risks.
“People need to be financially and emotionally ready … The economy isn’t going to recover right away despite the easing of Covid-19 restrictions. The housing market needs time to digest the impact,” Zhang said.
Is the end in sight for China’s property crisis?
Zhang expects at least two quarters before home sales show any signs of significant improvement, adding that a lot rests on China’s economic recovery as the country opens up following the pandemic.
During the second week of December – around the time China decided to relax its Covid-19 control measures – 1,031 new homes were sold in Beijing, a 31 per cent increase from the previous week, according to online property agency Zhuge Zhaofang. However, sales of lived-in homes dropped 3 per cent in the comparable period.
The easing of Covid-19 restrictions will not directly impact China’s housing market, but home prices are likely to get an indirect boost from the opening of China’s economy, said John Howard, executive director and head of international capital for Asia-Pacific at Colliers.
“The positive impact will be felt most in tier 1 cities like Shanghai, Beijing and Guangzhou,” he said. “The overall view is that home prices in tier 1 cities should go sideways in the short-term with an upwards trendline [in the] long term.”
