The People’s Bank of China’s survey for the first quarter of the year, released on Monday, indicates that an increasing number of Chinese people are once again looking to purchase homes.
In the first quarter survey, the proportion of respondents intending to purchase a home within the next three months increased to 17.5%, a higher rate than the 16% reported in the preceding quarter survey and the highest since the first quarter of 2022.
Survey results indicated a considerable improvement in market expectations, with 18.5% of respondents foreseeing an increase in house prices, a significant rise from 14% in the fourth quarter and the highest since the third quarter of 2021.
The increase follows the end of China’s Covid controls. Central and local governments have also rolled out support for property purchases and developers in the last year.
In the summer of 2022, a number of homebuyers decided not to pay their mortgages after Covid and financial difficulties kept developers from delivering apartments on time. Houses are typically purchased ahead of completion in China.
The country’s massive property sector slumped in the last two years after the central government cracked down on developers’ high reliance on debt for growth.
More recently, authorities emphasized the need to help developers finish construction on apartments.
Signs of a real estate turnaround
Other reports indicate a coming turnaround in China’s property market slump.
In March, home prices rose for the first time in more than seven months.
That’s according to a study of 100 cities that found the average price per square meter for a new apartment rose month-on-month by 0.02% to 16,178 yuan ($219 per square foot) released over the weekend by the China Real Estate Index System (CREIS), a consultancy.
Market trends varied across the country.
In terms of floor space, the CREIS study found that transaction volume in the cities of Hangzhou and Tianjin doubled in the first quarter from a year ago, compared to China’s largest cities which only saw a 0.2% increase.
Separately, property manager JLL said the high-end residential market in Beijing saw transaction volume climb by 20% in the first quarter from the prior quarter.
Most people still prefer to save
The PBOC survey found that most people were still inclined to save, despite China ending its stringent Covid controls in December.
In the first three months of the year, the share of respondents saying they preferred to save fell by 3.8 percentage points from the prior quarter to a still relatively high 58%.
During the pandemic, people’s penchant to save soared to record highs, the central bank survey showed.