(Yicai Global) March 1 -- Poly Developments and Holdings Group continued to rank first as China’s property sales picked up last month thanks to the impact of favorable government policies.

Poly had implied sales of CNY31 billion (USD4.5 billion) in February, up 82 percent from a year earlier. The Guangzhou-based homebuilder sold property worth CNY27.5 billion in January and CNY58.5 billion in the first two months of 2023, according to figures from the research center of China Real Estate Information Corporation.

Sales at the top 100 real estate developers in the country totaled CNY461.6 billion (USD67 billion) last month, a 29 percent increase on January and a 15 percent gain from a year ago, the CRIC data showed. But only 22 notched up sales of more than CNY10 billion, compared with 30 in the same period of last year.

In the first two months of this year, sales fell 11.6 percent from a year ago to CNY819 billion, an improvement on January’s 32 percent plunge, according the data.

The two-month figure more accurately reflects changes in the property market because the week-long Chinese New year holiday fell in January this year and February last year, skewing the results for single months.

Seventeen of China’s top 30 developers had higher sales in February compared with a year before, with eight more than doubling them, figures from think tank Yihan showed. Sales at Hong Kong-listed Poly Property Group, a smaller sister company of Poly Developments, Zhuhai Huafa Properties, and Yuexiu Property more than tripled, according to data from EU Consulting.

Market Outlook

The housing market’s recovery in first- and second-tier cities will hopefully continue, said Liu Shui, research director at the China Index Academy. The stable market upturn in some cities will also strengthen further, but a shortage of new homes in popular cities may impact sales in the short run, he added.

The uptick in second-hand home sales was a little better than that for new builds last month, reflecting the gradual return of confidence among buyers, which also lays the foundation for the market’s recovery, according to the CRIC’s research center.

The value of property transactions will also increase in the short term, as a large number of new houses will be released to the market this month, the research center added.

Market insiders disagree on whether the upturn in sales can last. Some said the market is really picking up as the various supporting policies do work, a source at a developer in southern China told Yicai Global.

But the mainstream opinion is that the recovery is helped more by the release of pent-up demand, which means new demand has yet to emerge, which will probably dampen near-term demand, the person added.

“Whether the market can continue to recover stably or not depends on the developers’ overall capability of constantly supplying new houses, as well as the recovery of residents’ demand and purchasing capacity,” the CRIC’s research center pointed out. 

Editors: Tang Shihua, Futura Costaglione