Home sales rise in Beijing
北京房屋销量上涨

Our reporter Yang Chengxi interviewed experts from real estate agencies in Beijing to find out what's causing the growth of existing home sales in first tier cities.

China has lowered its interest rates twice this year to support the slowing housing market. The government also rolled out major measures in March to foster existing home sales. Mortgage down payments have been lowered and sellers can now get a sales tax exemption if the apartment for sale is owned for more than two years. Housing agencies in Beijing say they have been noticing an immediate positive effect.

The municipal government has also introduced additional measures to boost the supply of existing homes.

In Beijing, second-hand home sales have risen sharply in June, as the city’s home purchase policy eased further this month. If a home owner sells his apartment, he will be considered as a first-time home buyer again, allowing him more favourable mortgage options.

Supply and demand for existing homes is expected to continue rising this year in Beijing thanks to the measures. Housing experts say the new dynamic is not likely to boost prices in the process.

Analysts believe the situation could be different across second or third tier cities, where house prices are lower and there is an over-supply of new homes. More people in those cities will be looking to buy new homes instead of existing ones. New house prices in those areas remain sluggish and developers will need to unload their inventories.