Chief Financial Officer Li-Lan Cheng of E-House, a Shanghai-based provider of real estate services, said it is recording ‘very strong’ property sales after volume doubled in the first quarter.
He added, ‘The rebound is picking up speed, Transaction volumes have been sequentially stronger every week because of lower prices, favorable government policies and pent-up consumer demand.’
An improving housing market adds to evidence that Premier Wen Jiabao’s RMB4 trillion ($586 billion) stimulus package is reviving growth. China’s manufacturing expanded for a third month in May, the government said June 1, while lending and retail sales have surged.
E-House reported a 130% rise in first-quarter transaction volume from a year earlier. Sales in April and May according to Li-Lan Cheng were ‘phenomenal’ and also doubled from last year’s levels, he said.
But, he said, property prices in China’s biggest cities will remain ‘flat’ in 2009 because of excess inventories.
The China Se Shang Property Index of 24 real estate companies has doubled in 2009, helping the Shanghai Composite Index to post a 52%t gain,
Bloomberg reports the China Banking Regulatory Commission said in its annual report that real estate is among industries that may default on loans, causing growing pressure on Chinese banks.