Knight Frank: This Year's First-Hand Sales of Residential Properties in the Greater Bay Area Expected to Increase by 20%, Supporting Stable and Positive Trend in Home Prices.

A survey by Knight Frank shows that, benefiting from several favorable housing policies from the central government, residential transactions in the Greater Bay Area have rebounded since October last year. It is expected that by 2025, the number of new residential units sold will increase by about 20% to around 380,000 units, supporting stable and positive housing prices. Tao Ruhong, Vice President of Knight Frank Greater China and Head of Strategy and Development Advisory Department of Greater China, stated that he believes the worst situation is behind us, and the real estate market is stabilizing with the support of the central government's policies. He believes that with the support of favorable policies, transaction volume can be maintained at the current level, supporting stable and positive housing prices. In the future, purchasing power in the Greater Bay Area will be concentrated in first-tier cities such as Guangzhou and Shenzhen. He mentioned that although the overall number of new residential units sold in the Greater Bay Area in 2024 was about 318,000, a decrease of 16% from 2023, the decline was mainly concentrated in the first three quarters, with a slight rebound in the fourth quarter. In terms of residential prices, the prices of new homes are more affected by the quality of the projects introduced by developers. In the second half of the year, prices of new homes in the nine mainland cities in the Greater Bay Area were mixed. Regarding the second-hand market, taking Shenzhen as an example, based on data from the National Bureau of Statistics, the prices of second-hand homes were in a state of adjustment in the first nine months of 2024, with a total decline of 9.2% in the first three quarters. However, the price index has stabilized in the fourth quarter. Chen Caili, Deputy Managing Director and Head of the China Capital Markets team at Knight Frank, stated that in the commercial property investment market in the Greater Bay Area, there were a total of 66 transactions worth more than 100 million yuan, totaling 44.7 billion yuan in investment in 2024, a decrease of about 9% compared to the previous year, accounting for about 20% of the total national investment. Chen Caili pointed out that investors are cautious in the current market environment, and it is predicted that overall property prices will remain stable in 2025. The outlook is positive for community retail and lifestyle shopping centers. In addition, office buildings are under the most pressure among all types of investment properties, and the market can pay attention to projects held by US dollar funds willing to sell at a discount.