According to DTZ, an international real estate consulting company, total floor space of new homes sold nationwide increased 18.6% year-on-year to 162 million square meters in the first four months this year.
This was also 21.2% above the year-on-year average of 2006 to 2008. Some 59 million sq m was sold in April, up 3.8% over March.
Analysts say the strong rebound was triggered by the government’s favorable policies on interest rates and taxation, and pent-up demand from 2008.
Statistics from the National Development and Reform Commission show that property prices in China’s 70 largest cities climbed 0.4% in April, 0.2 percentage higher than the previous month.
A number of developers have increased the unit price at their projects, with some even setting the price higher by 20% or more. A project near Beijing’s eastern fourth ring road increased its price by RMB 5,200 per square meter, or 33%.
Li Wenjie, general manager of Centaline China’s North China branch, said property prices will probably drop again due to continued huge inventory pressure.
According to statistics from Savills, a UK-headquartered real estate service provider, an increase in transaction volumes in the first quarter helped absorb some of the unsold stock that built up in 2008, but 11.9 million square meters of residential space still remains on the Beijing market.
China Daily reported Zhou Chunsheng, professor at the Cheung Kong Graduate School of Business as saying the property market has stabilized and is set to grow steadily.
He cited credit expansion as one of the major reasons fueling the warming property market, but said credit will tighten in the remaining quarters of the year.