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News Release

Shanghai

JLL’s view on the new property measures – upgrade demand to be unleashed


Shanghai, April 1, 2015  - On 30th March, PBoC, MOF and SAT jointly issued a notice announcing new supportive measures for the property market. The new measures mainly include tax deductions and lower down payments for second-time homebuyers. At this year’s National People’s Congress (NPC) , Premier Li Keqiang changed the tone of the government’s property market policy stance from “restrictive” in 2014 to “accommodative” for 2015.  Prior to this announcement, we had seen places such as Fujian and Shanghai roll out or consider relaxed policies at the local level.

Just last week, JLL published an article pointing out that the next few weeks would be a critical period for policymakers and China’s housing market would soon stabilize if new supportive measures were rolled out.  The new measures will have a significant impact on China’s housing market.  Pent-up upgrade demand previously was depressed by restrictive measures and is expected to gradually fuel a recovery in sales. Most importantly, the latest move is sending a strong signal to the market that the regulators themselves desire a stabilized housing market. With sales picking up, China’s overall housing prices are expected to bottom out.  

Joe Zhou, Head of Research for JLL East China, said: “The market fundamentals vary substantially between cities. Most Tier 2 and 3 cities are still facing high inventories and large supply pipelines. Developers in these cities should continue to make the best efforts to clear up their inventories, rather raise sales prices.  In Tier 1 and 1.5 cities, market fundamentals look much healthier. The loosening measures are very likely to lead to an upward trend in housing prices in these cities.”

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