THE property market is shaking off the coronavirus effects as a gradual economic rebound and the further relaxing of centuries-old permits boost demand beyond the major hubs like Beijing and Shanghai.

Almost 60,000 prospective buyers flooded onto the registration website of Xixi Mansion last month for a chance to buy one of 959 apartments in Hangzhou, Zhejiang Province. The wave of interest crippled the website, prompting developer Sino-Ocean Group Holding Ltd. to rent an Internet cafe to process applications overnight.

“Interest rates are the lowest I’ve seen in five years,” said Ivy Lin, a software engineer who plans to buy a two-bedroom apartment at Xixi Mansion, which were selling for 2.5 million yuan (US$350,000). “Money will either flow to real estate or stocks, and I have to pick one to preserve assets.”

The nascent economic recovery from the outbreak and sky-high home prices haven’t shaken investors’ long-standing belief that real estate is a safe bet. Even as consumer demand and private sector investment in the world’s second-biggest economy remain weak, property prices rose in May at the fastest pace in seven months.

China’s housing recovery, coupled with gradual rebounds in Singapore and South Korea, signal Asia may be charting a path for the rest of the world with a surprisingly fast housing reboot as virus lockdowns ease. South Korea even took steps to curb overheating in the property market last week, with stricter mortgage and tax rules to prevent speculation.

Several city governments further relaxed residency requirements in response to the virus, boosting migration and real estate demand.

Right after the March reopening, the eastern city of Suzhou reduced tax-paying thresholds for hukou. Non-residents now only need to pay tax for six months to obtain residential status, a quarter of the previous time. Jinan, the provincial capital of Shandong, wiped out almost all hurdles for hukou in early June.

“The biggest cities are lowering their bars for admission of talent, which together with the natural draw of such cities is set to boost their housing demand,” according to a report by Bloomberg Intelligence analysts Kristy Hung and Patrick Wong.

The dizzying migration to these regional hubs is showing little signs of easing. Hangzhou, a city of 10 million people where Alibaba Group Holding Ltd. is based, added 554,000 residents last year, 10 times the population growth in China’s biggest city of Shanghai.

These measures, which Nomura Holdings Inc. calls “stealth easing” for the property market, have stoked confidence for developers. Armed with cheaper funds, builders have been snapping up land plots, breaking price records in cities like Shanghai, Guangzhou and Shenzhen since February.

It’s a similar story in eastern Nanjing, where thousands of prospective buyers wearing face masks lined up outside a convention center this month, competing for a 57-to-1 chance to buy an apartment in Beyond City for about US$500,000 each. In southwestern Chengdu, Evergrande touched off a craze when it sold almost 1,200 units in a day for a project about a third the size of New York’s Central Park.

Following the hukou relaxation, housing sales in Hangzhou jumped 49 percent in May from its monthly average last year, China Real Estate Information Corp. data show. The effect is even bigger in Nanjing and Jinan, with sales up 79 percent and 97 percent from 2019 monthly averages.

(SD-Agencies)