At the tail end of Q1 2016, tighter restrictions on house purchases were introduced to first-tier cities in Shanghai and Shenzen in an attemot to curb speculative investment. In spite of the continued growing sales prices, we are not likely to see these restrictions occur in Beijing's residential property market.
In Q1 2016, buying sentiment continued to improve as several stimulus policies were announced, including a cut to the bank reserve ratio in March and a reduction in the deed tax for certain home buyers. In Beijing, transaction volume for new houses incred by 75% YOY. Sentiment was particularly strong in the high-end market, where the transaction volume grew by more that 90% YOY.
In the leasing market, two serviced apartment projects permanently withdrew from the market and a number of units from another project began renovations. Leasing demand for high-end properties rebounded moderately as a seasonal tenants returned, leading the vacancy rate to edge down and the rent to edge up this quarter.
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