BEIJING/HONGKONG (Reuters) - China's average daily home sales during the Golden Week holiday leapt 23% by floor area from the same period last year, boosted by improved market sentiment after the government's support policies, a survey by the China Index Academy showed on Tuesday.
The market, in a slump since 2021 after a string of cash-strapped developers defaulted on loans, got a lift from stimulusmeasures announced by the government just days before the week-long National Day holidays began.
Sales rose the most in 10 smaller tier-three cities, rising 69%, among the 25 cities surveyed between Oct. 1 and 7. Tier-one cities reported an 18% increase in sales.
However, the property market is still grappling with deeply indebted developers, large inventories of new homes and unfinished projects, lacklustre buyer confidence and a strained financial system.
When accounting for the additional two days from last year's Mid-Autumn Festival, which fell close to the Golden Week holidays, home sales recorded a 27% decline.
Ahead of the week-long public holiday commencing Oct. 1, the central bank unveiled a stimulus package, including a cut in the minimum down payment ratio to 15% for all housing categories and an impending cut in mortgage rates for existing home loans.
At the end of September, Guangzhou became the first top-tier city to lift all restrictions on home purchases. Beijing，Shanghai and Shenzhen also relaxed curbs on purchases by non-local buyers.
State-backed Vanke reported robust sales in Guangzhou and neighbouring Foshan, attributing the success to the easing of restrictions in Guangzhou. It recorded transactions close to 3 billion yuan ($425.2 million) during the holiday, selling more than 200 units in each of three developments.
Major privately owned developer Longfor said its daily average sales rose 20% from a year earlier, and was 80% higher than the Labour Day holiday week this year.
"The transaction volume of some projects has exceeded that of the whole month of September," China Index Academy said.
The latest stimulus will continue to take effect in the short term, and home sales figures for October are expected to show significant growth, the firm said.
However, despite soaring sales, analysts warn it is premature to call it a solid recovery yet as further stimulus may still be needed.
($1 = 7.0560 Chinese yuan)