China property: ‘iPhone City’ gets a consumption upgrade incentive with trade-in scheme to revive woeful housing market

Name: Chinese investors offloading overseas properties
Uploaded: 2024-04-14T03:30:12.000Z
Duration: 10 min 45 s
Description: Chinese investors offloading overseas properties

Zhengzhou city’s trade-in scheme remains short on details while an abundant supply of existing homes is complicating the outlook, some agents say

At least 30 other mainland cities have introduced the scheme, as home sales and prices have continued to slide into 2024

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An aerial photo of a Country Garden housing project in Zhengzhou in August 2023. Photo by AFP

Yulu Ao

Published: 11:30am, 14 Apr 2024

China is encouraging more property owners to swap their old homes for new ones as a way to rejuvenate the market, with a local government in central Henan province joining at least 30 other mainland cities in embracing the “trade-in” programme.

Authorities in the provincial capital Zhengzhou, home to the world’s largest iPhone factory and a key vehicle manufacturing base, have agreed to purchase as many as 10,000 existing homes by year end as a way to induce owners to swap their assets and give its woeful housing market a boost.

For a start, a local-government entity will buy 5,000 units of homes and renovate them for reselling at a later date, according to the plan unveiled earlier this month. The city’s housing authority will separately push owners of another 5,000 units to list or sell them in the open market, promising speedy approvals and tax breaks.

“Homebuyers are keeping a close eye on the details that are expected to come by the end of this month,” Zhao Fanghao, a property agent based in Zhengzhou, said. Inquiries and viewings from prospective buyers have increased by about 20 per cent since the policy was announced, he added.

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Chinese investors offloading overseas properties

Many local government authorities have tweaked dozens of policies to boost home demand, including tax reduction, amending ownership rules and reselling limits. Some 30 cities have introduced the “trade-in” programme to spur sales in the primary and secondary markets, according to China Index Academy.

Prices of second-hand homes in 100 mainland cities fell in March, the academy said, extending a sequential monthly drop that began in April 2022. This year alone, some 276 easing measures have been introduced across 160 cities to halt the market slump, according to data compiled by Zhuge Real Estate Data Research Centre.