APPD Market Report Article


May 26, 2024

Silvia Zeng, Head of Research, South China


RMB 92.2


Little improvement in market sentiment

  • The economic instability continuously suppressed residential purchasing demand. Both overall Primary and Secondary transaction volumes further contracted compared to 4Q23. In particular, demand for small and affordable houses dominated market demand, with units below 120 sqm accounting for more than 70% of the new houses sold in 1Q24.
  • As for the high-end market, there was increased house viewing in response to the easing of purchasing restrictions on residential properties larger than 120 sqm. However, sales improvement was below expectations as potential buyers kept a cautious attitude.

Two new high-end residential projects launch

  • Two projects were introduced to the market in 1Q24, namely Naturalistic Mansion located in Tianhe district and One Oasis located in Haizhu district. Along with the addition of some existing projects, a total of 1,235 new high-end residential units were recorded.
  • No high-end residential projects were completed in the quarter.

Residential prices continue to decline

  • In 1Q24, some developers with high destocking pressure chose to offer additional discounts. Thus, primary high-end residential prices decreased by approximately 1% q-o-q. Owners were also lowering the prices of secondary houses to facilitate transactions, under pressure of having more units for sale than the number of buyers. A widening decline of 4% was observed.
  • The leasing market saw a recovery in enquiries in 1Q24, driven by the resumption of work after the Chinese New Year. Owners were willing to lower rents for vacant units. The city’s high-end residential rents decreased by 0.3% q-o-q.

Outlook: Prime capital value correction to continue in the short term

  • Market sentiment is expected to stay weak in the short term, as most buyers are keeping a wait-and-see strategy due to uncertainties. It is anticipated that the government will continue to optimise its housing and financial policies throughout the year, providing some support to the market.
  • On the sales side, it is expected to see further price reductions by landlords and house owners to facilitate transactions. The decline of prices in secondary properties will likely continue as some are rushing sales at low prices.

Note: Guangzhou Residential refers to Guangzhou's luxury residential market.

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