Policy easing measures strengthen January sales

Potential customers look at a model of a real estate development in Haikou,?Hainan province, Oct 18, 2015.[Shi Yan /for China Daily]

China's major real estate developers' sales surged in January thanks to a series of property easing policies by the government, including a relaxation in housing purchase regulations.

Property group China Vanke Co Ltd's sales in January reached 25.59 billion yuan ($3.89 billion), a year-on-year increase of 10.3 percent, while Guangzhou-based developer Evergrande Real Estate Group reported sales of 21.23 billion yuan, a 83 percent increase compared to the same period of 2015.

According to Ouyang Jie, deputy head of Future Land, the outlook for China's real estate market in 2016 is believed to be more optimistic than last year, thanks to the easing policies released by the government earlier this year.

The People's Bank of China and the China Banking Regulatory Commission announced a reduction of the down payment limit for first-time homebuyers from 25 percent to 20 percent earlier this month, which analysts believe will help prop up the country's flagging housing market.

It's the second time in less than five months that the central bank has lowered the down payment limit for first-time buyers since last October, when the authorities dropped it from 30 percent, at which it had stood since 2010, to 25 percent.

Many major real estate developers also have a brighter outlook in 2016, with Vanke aiming to achieve sales of 300 billion yuan, a 15 percent increase from its 261.4 billion yuan in 2015, and 200 billion yuan in sales expected by Evergrande, up 11.1 percent from 180 billion yuan in 2015.

However, experts believe 2016 will still remain challenging, especially for some small- and medium-sized property developers, and those with projects in third- and fourth-tier cities, as China's slower economic growth and high debt levels among real estate developers might crimp growth in the year ahead.

According to Zhang Dawei, chief market analyst at Zhongyuan Real Estate Co, sales in third- and fourth-tier cities still remain challenging, with a substantial inventory of unsold housing against a backdrop of general economic slowdown and lackluster business.