Housing demand recovers slightly in Q1 2025

• In the absence of any housing purchase restrictions and with low interest rates, market demand in Guangzhou is showing signs of gradual recovery. The primary and secondary mass market recorded 36.8% and 26.2% y-o-y increase in units sold in the quarter.
• Due to the new design specifications announced by the government, which allow residential projects to have a higher proportion of usable area, projects in accordance with the new design guideline are becoming increasingly favoured by home buyers.

The influx of new supply remains moderate

• Three existing projects launched new phases, adding 505 units to the total stock. Including fresh market entries, new launches totalled 1,052 units. About 63% of the new units came from Tianhe, Haizhu, and Liwan districts.
• No high-end residential projects were completed during the quarter.

New housing prices exhibit relatively stronger resilience

• Driven by relatively active demand, prices of primary houses with the new design guideline have demonstrated resilience. Meanwhile, developers and owners of properties with the old design guideline sustained their discount strategies to attract buyers.
• As for the rental market, rents edged down by 0.9% q-o-q. The outflow of tenant toward more affordable housing options was seen, while certain property owners temporarily switched from selling to leasing in consideration of the falling prices.

Outlook: The decline in housing prices is likely to continue

• Market sentiment is expected to be sluggish on the back of economic uncertainties. Developers or vendors may continue to offer discounts to lure buyers back to the market.
• Given the government’s efforts to improve residential design standards and plans to introduce more prime residential land in Guangzhou, primary properties are likely to become more competitive, potentially leading to faster price stabilisation than secondary properties.