Market sentiment turns downward in Q3 2024

• The lack of economic momentum led to a weaker income forecast. Adding to the sluggish residential market performance, the residential purchasing demand stayed weak despite a further drop in LPR in July.
• Sales in the overall market gradually declined from June to September. The purchasing attitude in the high-end residential market also turned weak. Home buyers showed a preference for primary properties, given the better incentives provided by developers.

New supply reaches a peak

• Four new high-end residential projects entered the market in Q3 2024, contributing 1,122 new units. Also, 1,820 new units were observed from existing projects. Therefore, the total new supply reached nearly 3,000 units, the highest volume in a quarter since 2019.
• Around 40% of the new supply was located in Panyu District, and the remaining units were distributed in Tianhe, Liwan and Haizhu Districts. Five high-end projects completed in the quarter, adding 2,446 units to the total stock.

The decline of property prices accelerates

• As fewer enquiries were observed and new supply added to the market competition, developers and private sellers had to offer more discounts to attract buyers. The decline in sales prices for both primary and secondary properties accelerated in Q3 2024.
• Due to the rapid decline in asset prices, some potential buyers opted to rent properties while continuing to monitor the market. Leasing enquiries remained steady in the CBDs. Overall, high-end residential rents experienced a slight q-o-q decrease of 0.5%.

Outlook: Policy relaxation may help stabilise the market

• Guangzhou removed all housing purchase requirements at the end of September. Together with other favourable monetary policies, including a lowered policy interest rate, it is believed this will help rebuild residential market confidence.
• More positive market predictions are believed to drive purchasing decisions in the short term, especially in core locations where future supply is limited. Therefore, it may facilitate the bottoming out of prices in these submarkets in the future.