A Snapshot of Beijing Apartments Market

The Beijing residential market logged a significant rebound in 1H09, after the slump since mid-08, as evidenced by the upticks of sales volume and market sentiment. Demand for owner-occupancy was triggered by the central government’s preferential housing policy while investment activities were stimulated by the continued loosen monetary policy with large amounts of funding accessible through banking loans, equity and bond issuing. The significant improvement of market performance should generate more optimism and bring about more positive effect on the housing market in the rest of the year.

Policy Relaxation versus Market Transactions

According to the Beijing Statistics Bureau, pre-sales areas of Beijing’s residential market totalled 6,747,000 sqm as of 1H09, up 147.23% y-o-y, compared to 2,729,000 sqm in 1H08. Meanwhile, the stock sales areas reached 1,711,000 sqm, up 123.95% y-o-y, compared to 764,000 sqm in 1H08. The strong sales performances during the reviewed period were a collective impact of price corrections since late 2008, amidst the global financial crisis, the released pent up demand, and growing investment activity under the backdrop of the economic rebound and inflation hedge considerations in late 1H09. An insight, from looking at the liquidity of bank loans for residential property sales transactions, suggests that the national newly approved home loans reached RMB466.176 billion, up more than 150% y-o-y, while the Beijing second-hand home loans amounted to RMB52.54 billion, up 139.6% y-o-y. The continued easing monetary policy since end-08 (People’s Bank of China, July 2009), which facilitated a simplified and more efficient process for individuals to apply for home loans and get approvals, has fundamentally accelerated the pace of a rebound of the local residential market.
update time：2012-2-4