On October 9, Caifinance News (Reporter Wang Haichun) reported that against the backdrop of a slight rebound in market enthusiasm in key cities during the National Day golden week, some developers are planning to withdraw price discounts.

A private real estate company recently announced that starting from October 8, the company will fully retract a 2% purchase discount on nationwide properties for sale. A central enterprise also issued a poster stating that starting from October 8, some projects will withdraw a 2% discount.

The above-mentioned real estate companies indicated that as they withdraw discounts, some developers are sending clearer signals to the market: certain projects they developed are going to increase prices.

A large state-owned enterprise in Beijing announced that from October 8 onwards, all properties for sale in Beijing will be increased by 2% based on existing prices.

"This move can be understood as, with the enhanced ability to attract customers to their projects, some developers are making some changes to their marketing strategies as sales conditions improve, attempting to attract more demand and accelerate market entry by withdrawing discounts or slightly raising prices," said Yan Yuejin, Deputy Director of E-House Research Institute. According to the public information, a few real estate companies are raising prices by only "controlling at 2%".

"This move can be understood as, with the enhanced ability to attract customers to their projects, some developers are making some changes to their marketing strategies as sales conditions improve, attempting to attract more demand and accelerate market entry by withdrawing discounts or slightly raising prices," said Yan Yuejin, Deputy Director of E-House Research Institute.

Analyst Guo Xinyu from CIREC stated that at the end of September, numerous favorable real estate policies were introduced from the central to local levels, helping to improve the real estate market. From the monitoring data of CIREC, it is apparent that in most cities, market enthusiasm has significantly increased before the National Day, especially in first-tier cities where the number of project visits and subscriptions have noticeably increased due to policy optimization.

"During the National Day holiday, new property subscription data will gradually be reflected in the contract data. We expect that market sales data for October are expected to show a significant increase," said Guo Xinyu.

From the perspective of property purchase intentions, after the implementation of a series of new policies in many places at the end of September, residents' property purchase intentions have increased, and house price expectations have improved.

According to the data from China Real Estate Research Institute disclosed on October 8th, the survey on residents' property purchase intentions showed that in September, residents' short-term market expectations indicated that the proportion expecting house price increases was 18%, up 10 percentage points from August, approaching a historical high in nearly three years; the proportion expecting house price decreases was 24%, down 15 percentage points from the previous month, showing an improvement in house price expectations.

The survey data shows that in September, the proportion of residents' intention to buy a property was 19%, a slight increase from the previous month. It increased by 4 percentage points from the lowest point in nearly three years. Although residents' property purchase intentions have slightly increased recently, they are still at a low overall level.

Analysts further pointed out that the property market heat during the National Day holiday has seen a slight recovery, residents' property purchase intentions have improved, but on one hand, current market attention is more focused on first-tier and hotspot cities, and we still need to pay attention to the market differentiation between cities; on the other hand, destocking pressures remain, and it remains to be seen whether market transactions can truly stabilize.

"Some real estate companies have recently announced the withdrawal of discounts, and some developers have raised the prices of properties for sale, which may be related to the better intrinsic quality of a few projects. However, overall, this does not fully represent the current market situation. Market stabilization, especially whether transaction volume can truly rebound, is a key indicator of stability, rather than just focusing on the actions of some real estate companies and individual projects," said an analyst from a Shanghai real estate institution.

On the supply side, according to data from the China Real Estate Research Institute, as of the end of August 2024, the total salable area of commodity residences in 50 representative cities was 0.335 billion square meters, a decrease of approximately 3.4% from the end of 2023. However, the decline in salable area is more influenced by the continued reduction in supply. Calculated by the average monthly sales area over the past 12 months, the short-term inventory clearance period is 22.1 months, an extension of 4.5 months from the end of 2023, reaching the highest point since the last "destocking" cycle.

Looking at different tiers of cities, as of the end of August 2024, the inventory clearance period was 15.4 months for first-tier cities, mainly driven by the shorter clearance period in Shanghai; 20.5 months for second-tier representative cities, an extension of 4.1 months from the end of 2023; and 33.4 months for third and fourth-tier representative cities, an extension of 8.8 months from the end of 2023, indicating continued significant short-term inventory clearance pressure.

On the demand side, data monitored by 58 Anjuke shows that based on the analysis of the housing search heat data of various tier cities during the National Day, only first-tier cities showed an upward trend during this year's 'Eleven', with a 17.4% increase. In contrast, the search heat in second-tier cities remained basically flat compared to the same period last year, while third and fourth-tier cities saw a 4.4% decline in heat.

"Looking into the reasons, demand expectations remain a key factor. Due to long-term uncertainties such as employment and income, there are high risks associated with the expectation of high leverage, leading to a conservative trend in residential housing consumption at present. Comparing data from the past four years, the increase in online search heat for new homes during the 2024 National Day holiday was the lowest. Despite the central government's call before the holiday to 'promote the stabilization of the real estate market', it still requires a comparison of transaction data from various regions, along with comprehensive observation and analysis to see if the previous weakening trend can be changed in the short term." Analysts from 58 Anjuke Research Institute stated.

Yan Yuejin also believes that overall, whether from the perspective of inventory or market changes, house prices are still mainly stabilizing, and price discounts are still an important factor in boosting sales for many new housing projects.

"Even if a few real estate companies retract price discounts and individual developers raise some project prices by '2%', there are still many real estate projects in the market that will offer significant price discounts and incentives, providing buyers with a large number of housing options." Yan Yuejin added.

Editor / jayden