High-end market sentiment improves moderately

• Further preferential policies were introduced in Q2 2024. The down payment was reduced to 15% for first and 25% for second homes. The social insurance requirement for non-Guangzhou residents to purchase homes was lowered from 2 years to 6 months.
• Overall primary market unit sales increased by 70% q-o-q, driven by the policy and attractive prices. There was no obvious uptick in high-end residential sales, but the increase in house viewings signalled a gradual recovery.

No new high-end residential project launches

• No new high-end residential projects entered the market in Q2 2024. Yet, 715 new units were recorded at existing projects. The sales of new supply remained tepid despite higher footfall in the sales centre.
• The first phases of Yuexiu Grand Mansion in Panyu were completed in the quarter, adding 1,714 units to the total stock.

Continuous price cuts by sellers to boost sales

• Stock pressure consistently pushed developers and individual sellers to offer more discounts, resulting in approximately 1% and 3% q-o-q drop on a chain-linked basis in the primary and secondary high-end residential markets, respectively.
• Stable leasing enquiries were observed in the CBDs, especially in ZJNT and Pazhou. For less popular submarkets, rents for vacant units decreased. Overall, high-end residential rents decreased marginally by 0.5% q-o-q on a chain-linked basis.

Outlook: Market sentiment will take time to recover

• The public is expecting more favourable policies to boost market sentiment. Therefore, the sales volume should maintain its recovery momentum. It is believed that upgrade demand will stabilise as the primary driver in the high-end residential market.
• Price discounts should persist in both primary and secondary high-end markets to attract potential buyers. Still, the secondary market may see a larger price drop than that in the primary market, considering the less competitive pricing currently.