(Yicai) March 25 -- The Beijing real estate market has shown signs of recovery so far this year, with both sales volumes and prices on the rise. Industry insiders say this rebound is the result of a combination of factors, including government policy support, the release of pent-up demand and steadily improving market expectations.

Over 23,000 pre-owned homes were sold online in Beijing in January and February, which is more than 2,000 units more than the 10-year average for the period, according to data from the Beijing Municipal Commission of Housing and Urban-Rural Development. By March 22, online signed transactions for second-hand homes in March had already reached 12,182 units, surpassing February’s full-month total of 8,130 units.

Last month, new home prices in Beijing rose by 0.2 percent from January and second-hand home prices climbed 0.3 percent, according to data released by the National Bureau of Statistics. This makes Beijing one of only two cities out of 70 medium-sized and large municipalities to post gains in both new and pre-owned home prices. And only four saw second-hand housing prices stop declining month-on-month.

From January to February, the average total prices of second-hand homes in the capital rose nearly 2.4 percent, according to data from Beijing Lianjia Real Estate Brokerage.

Changing Trends

The pre-owned housing market usually heats up in March after the Lunar New Year holiday, Guo Yi, chief analyst at Heshuo Real Estate Brokerage, told Yicai. But this year is different. Prices are showing signs of stabilizing after a decline. This is mainly because the number of listed properties has changed, he said. In March last year, Beijing had around 170,000 to 180,000 units on the market, a historical high, but now that number has fallen to just over 140,000 units.

From the end of last year to the beginning of this year, Beijing and Shanghai rolled out easing measures for the real estate market, according to Founder Securities’ research team. After a couple of months, this led to a concentrated release of pent-up demand.

The 58 Anjuke Institute said that before Beijing announced two new real estate policies in late December last year, many buyers had adopted a wait-and-see stance. After the new policies were announced, interest in both new and pre-owned housing immediately rebounded. After the Spring Festival holiday ended last month, as sales offices and agencies reopened, demand for housing quickly surged, with second-hand housing seeing a much stronger rebound than new homes.

The new measures, which include relaxed home purchase qualifications and optimized credit policies, are better suited to the second-hand housing market, the research institute said. New homes are limited by supply and project launches, so any increase in demand is more moderate.

Recovery Prospects

As for how long this rebound might last, Guo said that it mainly depends on changes in listed housing supply. In an upcycle of the Beijing market, there are usually between 80,000 and 100,000 pre-owned homes listed. If the number of listings falls below 120,000 units, market activity is expected to continue. If it falls below 100,000 units, prize stabilization and a potential rise would become more evident.

"Right now, the second-hand housing market is still in a state of flux," Guo said. “As the market has not fully shifted to sellers, it is too early to say how long the rebound will last.”

After four years of adjustment, many cities and regions have experienced "overshooting" price drops, real estate expert Ding Zuyu said on his WeChat account. As markets in cities like Beijing and Shanghai recover, other metropolises are likely to follow, suggesting a promising outlook for the nationwide market.

Editor: Kim Taylor