China's home sales surge 23% during Golden Week: Survey

China's real estate revival: During the recent Golden Week holiday, China's average daily home sales soared by 23 per cent in terms of floor area compared to the same period last year, driven by an uptick in market confidence following government support measures, according to a survey conducted by the China Index Academy on Tuesday.

The real estate sector has struggled since 2021, largely due to a series of defaults by financially troubled developers. However, a wave of stimulus initiatives introduced by the government just before the week-long National Day celebrations provided a much-needed boost.

Sales growth was most pronounced in ten smaller tier-three cities, which saw a remarkable 69 per cent increase among the 25 cities surveyed from October 1 to 7. In contrast, tier-one cities experienced an 18 per cent rise in sales.

Despite this positive trend, the property market continues to face significant challenges, including heavily indebted developers, substantial inventories of unsold and incomplete homes, weak buyer confidence, and a strained financial environment.

When factoring in the additional two days from last year's Mid-Autumn Festival—held close to the Golden Week—home sales reflected a 27 per cent decline.

In the lead-up to the October 1 public holiday, the central bank announced a stimulus package that included reducing the minimum down payment ratio to 15 per cent across all housing categories, along with plans to cut mortgage rates for existing home loans.

At the end of September, Guangzhou became the first major city to lift all restrictions on home purchases. Other cities like Beijing, Shanghai, and Shenzhen also eased restrictions for non-local buyers.

State-owned developer Vanke reported strong sales in Guangzhou and nearby Foshan, crediting the easing of restrictions in Guangzhou for its success. The company achieved nearly 3 billion yuan ($425.2 million) in transactions during the holiday, selling over 200 units in each of three developments.

Privately-owned developer Longfor noted a 20 per cent increase in its daily average sales compared to last year, which marked an 80 per cent jump from this year’s Labour Day holiday week.

"The transaction volume for certain projects has surpassed the total sales for the entire month of September," stated the China Index Academy.

While the recent stimulus measures are expected to positively influence short-term sales figures, analysts caution that it may be too soon to declare a definitive recovery, as additional stimulus may still be required.