(Yicai Global) March 10 -- The real estate market in Hangzhou, the capital of China's southeastern Zhejiang province, bounced back last month as second-hand homes sales reached the highest level in 20 months. Prices of new and pre-owned homes continued to fall.

Pre-owned home transactions in the city soared 133 percent to 7,396 units last month from January, according to Hangzhou Beike Research Institute. Some 8,452 new-builds were sold, up 1 percent from the month before and 98 percent from a year earlier.

The average price of a second-hand home in Hangzhou fell 2.2 percent to CNY30,765 (USD4,418) per square meter in February from the prior month, Beike noted, while the average for new homes dropped 12 percent from January and gained 7 percent from a year ago.

The phenomenon of rising sales and falling prices is mainly because 46 percent of the second-hand homes sold last month were small, with a floor area of between 60 and 90 sqm, and were priced at less than CNY3 million (USD430,000), market insiders told Yicai Global. It is difficult for average prices and sales to rise under such conditions, they added.

The number of home sellers in Hangzhou has also grown rapidly along with the ranks of buyers. Listings soared 268 percent in February to the most in a single month for 22 months, indicating that confidence among owners has yet to rebound, according to Beike.

The Hangzhou housing market recovery is mainly due to the release of pent-up demand, Beike pointed out. Sales of pre-owned properties will likely continue to rise this month, but the focus will remain on achieving stable prices.

Editors: Tang Shihua, Martin Kadiev