Easing of Shenzhen’s housing market policies may lift sentiment, but is limited and could be offset soon. Here’s why

The easing will ‘merely lure home upgraders who have spare money to purchase another home’, Shenzhen property agent says

More homeowners are urgently selling, rather than buying another home: Centaline’s China CEO

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Authorities in the southern Chinese technology hub of Shenzhen have cut down payments to 40 per cent for second homes from as much as 80 per cent, and changed the definition of luxury homes. Photo: AFP

Published: 9:00am, 4 Dec 2023

Homebuyers in Shenzhen have shown interest in upgrading their homes after the local government eased some policy measures, agents said, but expectations of lower incomes amid slower economic growth, which means people are still hesitant about big-ticket purchases, continue to be a key hurdle.

Just over a week ago, local authorities in the southern Chinese technology hub announced a cut in down payments to 40 per cent for second homes from as much as 80 per cent, and changed the definition of luxury homes to allow more buyers to enjoy such properties.

“Obviously, there are more people viewing homes after the easing,” said Alan Cheng, Centaline Property Agency’s CEO for southern China and its general manager in Shenzhen.

Data tracked by Centaline, one of the main property agencies in Shenzhen, shows that viewings of second homes rose by 24 per cent week on week on the first weekend – November 25 and 26 – after the easing.

Website views by buyers looking for second homes surged by 200 per cent last week compared with the previous week, Cheng said, adding that enquiries were increasing as well, although by not too much.

However, the easing of property policies is more likely to increase expectations of lower home prices rather than spurring actual demand, agents said, despite the more aggressive stimulus by China’s tier-one cities. The easing in Shenzhen comes after Guangzhou, another tier-one city, cut down payments by almost 30 percentage points to 40 per cent in September.