Beijing and Shanghai secondary home markets recover under supportive policies

China's strong policy support has sparked a recovery in the secondary residential market in Beijing and Shanghai, its two most important cities, the latest SCMP-Century 21 index showed.

The asking price in Beijing's used home market picked up 0.3 per cent to 41,835 yuan per square metre last month from February, the seventh consecutive increase. The financial centre of Shanghai also posted a sixth consecutive monthly rise of 0.5 per cent to 34,767 yuan per square metre.

Transactions also rebounded strongly month on month, by 107.4 per cent in Shanghai to 22,129 units and 37.4 per cent in Beijing to 13,207 units.

Momentum has been gradually building from the start of March with Premier Li Keqiang's supportive remarks to the struggling real estate market during the annual parliamentary meeting.

The authorities launched a spate of measures at the end of the month, including steep cuts in down payments and tax waivers as part of efforts to rein in a sharper-than-expected slowdown in the broader economy.

Consultancy Century 21 China Real Estate, the partner of the South China Morning Post for the monthly index, said the measures, to be further implemented by local governments and banks in the next few weeks, would unleash upgrade demand from families seeking bigger and better homes.

"After the latest relaxation, property market policies are now at their easiest in recent years. Under such circumstances, potential buyers will become more active to enter the market," Century 21 said.

"A silver April is waiting," it added, referring to the terms of "golden March and silver April" in China's property market when activity comes back after the Lunar New Year holiday as the weather gets warmer.

The SCMP-Century 21 secondary home price index rose to 160 last month from February's 159 in Beijing, while Shanghai also gained a notch to 144.

In year-on-year terms, prices dropped 1.3 per cent in the capital but were up 1.1 per cent in Shanghai.

Transaction volume grew 29.4 per cent in Beijing from a year earlier and edged up 2.8 per cent in the financial hub.