Home sales in major Chinese cities spike in April

The sales volume of new homes in major cities posted a solid gain in April thanks to policy easing, according to a report released by E-house China R&D Institute, a leading property consultant firm.

New home sales in China's 30 major cities -- including Beijing, Shanghai, Guangzhou and Shenzhen -- surged 15.1 percent in April from the previous month representing an increase of 30.8 percent from the previous year.

Of the tier-one cities, Beijing witnessed the strongest growth of 70.7 percent in April compared with a year earlier, noted the report released Wednesday.

China's property market took a downturn in 2014 due to weak demand and unsold property. In late March, the central bank cut the minimum down payment requirement for second home buyers to 40 percent.

Homes purchased more than two years ago are now exempt from business tax, the previously cap was five years, the Ministry of Finance announced. These easing measures were behind the recent rebound of the real estate market, analysts said.

Policy easing should further the property market in the months ahead, with a strong rebound expected in the second quarter, predicted Yan Yuejin, a researcher with the institute.

Some analysts believe that the deterioration of key economic data, including property sales and construction, will trigger more monetary easing.

The Political Bureau of the Communist Party of China Central Committee met on April 30, with a united call for more "forceful" policies and "a long-term mechanism for the healthy development of the property sector".

While policy easing has helped the biggest cities and done some good in second tier cities, it has done little to revive third- and fourth-tier cities, experts said.

Property sales have improved; however, growth in new projects remained muted, weighed down by a still large inventory overhang, UBS economist Wang Tao said in a recent research note. Enditem