Housing rebound

Beijing's property sales, including new and pre-owned homes, saw a strong rebound in the first half of May, according to the real estate brokerage Century 21. It said 7,132 apartments were sold in the first 15 days of May, up 103 percent year-on-year. Sales of pre-owned homes jumped 75 percent to 5,645 units.

"Property developers' strategy of cutting prices to stimulate sales did work. Also, potential buyers' sentiment improved," said Su Ri, senior analyst from Century 21.

According to China Index Academy, the research unit of the country's largest real estate website SouFun Holding Ltd, about 60 percent of the cities it monitors saw a rebound in property sales last week on a yearly basis.

Suzhou, Xiamen, Wenzhou, Lanzhou and Haikou had a rebound of more than 100 percent.

Some property developers have even increased prices.

China Resources Land Ltd plans to launch the second phase of its Spanish-style villa project in Beijing next month, and prices will probably be more than 20 percent above those on the first phase launched in November.

"Market sentiment did improve compared with the end of last year. And the number of our potential buyers, all of them buying for their own use, increased rapidly in recent months," said Gao Xing, marketing director of China Resources Land (Beijing) Co Ltd.

The Singapore-based developer Capitaland plans to launch a new building in its project along Beijing's eastern Fourth Ring Road at an average price of 42,000 yuan ($6,638) per square meter, compared with 39,800 yuan per sq m for the previous building, which it launched at the end of 2010.

Hu Jinghui, a senior real estate expert and vice-president of 5i5j Real Estate, said though the RRR cuts did not target the property market, the eased liquidity will help first-home buyers get mortgages and stimulate sales for owner-occupiers.

"We expect property sales for May will rebound strongly in Beijing", Su added.

The turnaround time for existing inventories is expected to decline from 9.6 months to 7.8 months over the course of this year, according to CLSA research.

'This amount of inventories will in fact keep property developers in competition with each other, thus helping prevent the property price from seeing a strong rebound," Wong said.

According to CLSA research, the country's gross sales in terms of floor area this year will grow 9 percent year-on-year.

Andy Rothman, China macro strategist for CLSA, the residential property market remains the key risk for the country's economy this year.

Fixed-asset investment registered its lowest growth in a decade at 20.2 percent in the first four months of the year.

New property investment growth slowed to 18.7 percent from 23.5 percent growth in the first quarter, according to the NBS.

"Though first-home buyers have found it easier to get mortgages from banks and could obtain favorable mortgage rates, the government still needs to do more to stimulate first-home purchases," said Rothman.