Summary of Key Points
The “429 New Policy” introduced at the end of April in Shenzhen (which relaxed the purchase restrictions for residents in Futian, Nanshan, and Bao'an's Xin'an districts, allowing purchases with a residence permit and eligible individuals to buy an additional property) had an immediate effect: business owners from other regions flocked to Shenzhen to inquire about purchasing homes. The sales activity in the core areas (Futian and Nanshan) was robust, with luxury properties selling well. As a result, the entire Shenzhen real estate market experienced a “Red May” in May, with the total number of online transactions for both new and second-hand homes exceeding 10,000 units (10,077 units), returning to a high level after 14 months. Second-hand housing prices rose to 60,800 yuan per square meter, and inventory levels dropped to their lowest point in nearly a year, indicating a structural recovery with strong demand in the core areas and a booming luxury market, while the overall market stabilized.
Detailed Analysis
1. What exactly did the new policy relax, and why did customers from other regions suddenly come?
The core of the new policy was to “targetedly lift restrictions on purchasing in the core areas.” Previously, to buy property in Futian and Nanshan, one needed a Shenzhen household registration or continuous payment of social security/individual income tax. Now, with just a residence permit (which is relatively easy to obtain), one can purchase a home, and eligible individuals can buy an additional unit. This directly attracted business owners from other regions who saw the economic competitiveness of Shenzhen and considered property in these areas as high-quality assets. For example, during the “May Day” holiday, LeYouJia received clients from Zhejiang, Shenyang, Hong Kong, and even some who purchased residence permits and completed transactions online.
2. Why were the sales so strong in the core areas and for luxury properties?
Futian and Nanshan have long been known as areas where wealthy individuals look to upgrade their homes. The new policy lowered the barriers to entry, releasing pent-up demand.
- Data Highlights: In May, new home sales in Futian increased by 52% month-on-month, and in Nanshan by 45%. In Nanshan, 24.3% of the second-hand homes sold were worth over 10 million yuan, leading the city.
- Luxury Case Examples: The luxury projects “CITIC City Kaixin Yuewan” in Nanshan and “Shenzhen Guanchao” in Bao'an sold out on their opening days. One of the duplex units sold for 398,600 yuan per square meter, with a total price exceeding 200 million yuan, setting a new national record for luxury housing prices.
3. How hot was the entire Shenzhen real estate market in May? Has the “Red May” been confirmed?
Absolutely! LeYouJia’s data shows:
- Total Transactions Exceeded 10,000: 10,077 units were sold online in May, the first time this has happened since April 2025, a 28% increase from the previous month, indicating high market activity.
- New Home Sales Surge: 4,543 new homes were sold online, a 34% increase from the previous month, due to active developer listings and customer demand.
- Stable Second-Hand Market: 5,534 second-hand homes were sold online, a slight 6% decrease from April but a 21% year-on-year increase. The market has remained above the 5,000-unit mark for four consecutive months (excluding February during the Spring Festival), indicating a healthy market.
4. Why did second-hand housing prices rise, and why did inventory decrease? Has the supply-demand balance improved?
Yes!
- Price Increase: The average price of second-hand homes rose to 60,800 yuan per square meter, up 5% month-on-month. This is due to increased market confidence and the majority of transactions occurring in the core areas, where properties are more expensive.
- Inventory Decline: As of the end of May, LeYouJia’s inventory of available second-hand homes had decreased for six consecutive weeks, by 2.1%, with fewer new listings. This indicates that sales outpaced new additions, indicating a improving supply-demand balance. Previously, there were more houses than buyers; now, the number of houses is decreasing while the number of buyers is increasing.
5. What will the future of Shenzhen’s real estate market hold? Structural differentiation is key
Experts predict that the recovery will continue with policy support, but it won’t be a general increase in prices; instead, there will be differentiation:
- New Homes: Luxury and highly sought-after properties (with good locations and scarcity) will remain popular, as wealthy individuals are still willing to buy them. However, peripheral areas (such as Longgang and Pingshan) will see more stable sales.
- Second-Hand Homes: Market expectations are improving, and prices and volumes are expected to stabilize, but the gap between the core and non-core areas will widen—core areas (Futian and Nanshan) will remain active, while non-core areas may remain lukewarm.
In summary, Shenzhen’s real estate market recovery is not a widespread phenomenon; it is targeted at the core areas and luxury demand. For ordinary buyers, it’s important to consider their own needs and not blindly follow trends. However, the asset value in the core areas has indeed been recognized by the market.