Housing Ministry Says Real Estate Enters 'Stock Era,' Property Stocks Rally, Mortgage Subsidy Rumors Circulate

On September 23, real estate stocks continued their strong upward trend. In A-share markets, property service stocks including Huayuan Holdings, I Love My Home, and Worldlink saw gains. Meanwhile, Hong Kong-listed mainland property stocks also rose in tandem, with Ronshine China surging 22.22%, and several other stocks—including Shimao Services, Central China Real Estate, Deson Development, and Fangyuan Life Services—climbing over 6%.

So, what factors are underpinning this rally in real estate stocks?

Policy Measures Intensify

According to China Times, the direct catalyst for this round of real estate stock gains may have been the press conference held on September 18 by the State Council Information Office, themed "Starting Strong in the 15th Five-Year Plan Period." At the conference, the Ministry of Housing and Urban-Rural Development issued two major assessments: the real estate market has officially entered an era of existing housing stock.

Data released by the Ministry showed that in the first eight months of this year, the online-contract area for second-hand homes reached 549.23 million square meters, a year-on-year increase of 10.6%. Second-hand homes now account for 52% of total market volume. The Ministry also outlined three foundational systems for the 15th Five-Year Plan period, including reforms and improvements to the project company system, the lead bank system for real estate development, and the financing and sales system.

A research institute under China Index Academy told China Times that it expects local governments to gradually implement policy details in the fourth quarter, translating central directives into actionable standards. All industry participants will need to proactively adapt to the new normal.

Subsequently, on September 20, the newly revised Regulations on the Management of Housing Provident Funds took effect. The most notable change is the expansion of withdrawal scenarios from six to nine, adding categories such as home renovation and property management fee payments. This marks a shift in the housing provident fund's role from primarily supporting home purchases and rentals to supporting a full-cycle housing consumption model encompassing "renting, buying, repairing, and maintaining."

Earlier, the "August 28" policy package was introduced, promoting the gradual adoption of presale-free housing sales, extending mortgage loan terms, and reforming industry financing systems. China Times noted that some cities have already responded by including presale-free conditions in newly listed land parcels.

Stabilization Signs in Core Cities

The flurry of policy measures is also sending positive signals to the market. Data from China Index Academy shows that from September 1 to 20, the area of newly built commercial housing sold in 30 key cities increased by 1.4% year-on-year. In Beijing and Shanghai, policy optimizations on the demand side in August have kept market activity high, with new home sales area rising 23% and 22% year-on-year, respectively. Among second-tier cities, Wuhan recorded 450,000 square meters in sales, up 18% year-on-year, while Suzhou and Ningbo saw increases of 29% and 21%, respectively.

The second-hand housing market has been even more active. From September 1 to 20, 82,000 second-hand homes were sold in 20 key cities, a year-on-year increase of 13.1%. Cumulatively, as of September 20, second-hand home sales in these 20 key cities reached 1.08 million units, up 6.8% year-on-year. In Beijing and Shanghai, second-hand home sales have achieved year-on-year growth for seven consecutive months, indicating sustained market activity.

"New home sales in first-tier cities continue to grow, but market recovery is concentrated in high-quality districts and projects in core cities, with structural divergence persisting. Second-hand home prices have adjusted more fully, and the supply of listings is more diverse. These homes will continue to absorb some刚性 demand and replacement demand, so transaction performance is likely to remain relatively active," said Cao Jingjing, General Manager of the Index Research Department at China Index Academy, in an interview with China Times.

Real Estate Stocks Rally

So, are the ongoing policy implementations and stabilizing market conditions in some cities the main drivers of this real estate stock rally? Yan Yuejin, Vice President of the Shanghai E-House Real Estate Research Institute, told China Times that the rise in real estate stocks is more closely tied to overall capital market performance. "When the broader market performs well, real estate stocks tend to rise easily—that's the current main logic."

He added, "The logic behind the rise in real estate stocks is also quite clear. Currently, valuations for real estate stocks are generally low, and there aren't many high-quality real estate stock targets available in the market. The remaining stocks are relatively sound. While sales data hasn't seen a rapid uptick, new home data is showing some signs of bottoming out, which also has a positive effect on the stock market."

Additionally, ahead of the National Day holiday, rumors have circulated about a substantial mortgage interest subsidy. According to these rumors, a nationwide mortgage interest subsidy policy may be implemented before the National Day holiday, with combined central and local subsidies potentially reaching up to 100 basis points, pushing the minimum first-home new loan rate down to 2.05%.

These rumors are not entirely unfounded. Previously, cities such as Nanjing, Wuhan, and Chengdu have introduced subsidy plans based on their local market conditions. However, Yan Yuejin noted that it seems around major holidays, rumors of policy easing or other supportive measures often surface, but many are not true. "In fact, the rise in real estate stocks has little to do with recent policies," he said.

(Source: China Times)