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The trade in residential apartments continued to pick up at the beginning of March, which implies that a market recovery bolstered by inelastic demand may occur in some regions.
This followed the rising volume of trade, on a weekly basis, seen in the property markets of the nation's major cities in February.
During the week ended March 4, an aggregate of 2.06 million square meters of residential space were traded in China's 20 major cities, an increase of 2.9 percent from the previous week, according to information from China Real Estate Information Corp.
Changsha in Hunan province saw transactions of residential space surge 127.1 percent in the same week, topping the 20-city list.
Analysts said the volume of residential trades rebounded as early as February in 10 major cities, with Tianjin soaring 91.75 percent month-on-month and Shanghai surging 89.10 percent, according to CRIC.
One example occurred in Nanjing, Jiangsu province. On March 4 alone, two residential projects developed by China Overseas Holdings Ltd, a subsidiary of China State Construction Engineering Corp, recorded sales revenue of 1.15 billion yuan ($182 million), according to a salesperson, who spoke on condition of anonymity. "We sold more than 200 units on Sunday," said the salesperson of one of the projects.
The only concern is that they will not have enough apartments to sell, she said.
China Overseas Holding Ltd said it cannot reveal detailed figures or comment on its sales performance because of a lack of adequate information on these projects.
A similar sales spree happened in Shanghai. A project developed by Poly Real Estate Group, the nation's second-largest property developer by market value, sold 257 units, or 28,700 sq m, in the week starting Feb 27, according to Shanghai Centaline Property Consultants. The project, located in the Baoshan district, is on average priced at 17,046 yuan per sq m.
Seeing no signs of a change in the government's property policy in the near future, some homebuyers, who were expecting to see bigger cuts in house prices, have decided to buy, said Hui Jianqiang, research director of Beijing Zhongfangyanxie Technology Service Ltd, a real estate information provider,
"Inelastic" demand, including the need of newly weds to buy an apartment or the necessity of families moving to a bigger apartment that can house more people, cannot be resisted for long. That's because there's been little change in house prices, and when people think a discount on the residential projects is attractive enough, they will decide to buy, said Hui.
Song Huiyong, a research director at Shanghai Centaline Property Consultants, suggested home buyers should be cautious in their decisions.
"Most of the residential properties that have seen a better sales performance recently gave discounts of between 10 percent and 20 percent, but this is just the beginning of a wide-ranging property price adjustment," said Song.
