HOME sales in two of China’s biggest cities soared in the past two days following mortgage relaxations, an early sign that government efforts to cushion a record housing slowdown is helping.

Existing home sales for Beijing and Shanghai doubled over the weekend from the previous one, according to CGS-CIMB Securities. “We were surprised by the strong pick up in Beijing and Shanghai, despite the challenging economy,” said Raymond Cheng, head of China property at CIMB.

The two mega cities – each with a population of more than 20 million – benefited the most from Thursday’s (Sep 31) announcement which lowered down-payment thresholds across the nation. Beijing and Shanghai also will no longer disqualify people who’ve previously had a mortgage – even if fully repaid – from being considered a first-time homebuyer, as long as they don’t own a property, according to separate statements from the city governments.

A Bloomberg gauge of Chinese developer shares jumped as much as 8.7 per cent on Monday.

New-home projects also drew interest. In Beijing, more than 1,800 units of new homes were sold on Saturday alone, more than half of the 3,100 homes in August, according to Centaline property agency analyst Zhang Dawei.

Some new housing projects in Shanghai recorded the same number of transactions in just one day as they had during the previous month, according to a separate report in The Paper.

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Zhang added that second-hand home transactions in Beijing grew by more than 100 per cent to 1,200 units on Saturday compared with a week before, China Securities Journal cited him saying.

In order to handle the spike, property agents worked around the clock over the weekend. In Shanghai, prospective buyers viewed sample homes at a project in the Lingang area till 3.00 am, a day after the announcements, exceeding expectations of state-owned builder CSC Jiuhe, according to multiple agents who originally were only told to prepare to work till midnight.

“The recent easing since last week has exceeded expectations,” Betty Wang, senior economist at Australia & New Zealand Banking Group, said before the announcements in Beijing and Shanghai.

The measures came after China’s home sales slumped in August. Developer Country Garden Holdings, once the nation’s biggest, is on the brink of a default. Risks are spreading to the country’s US$60 trillion financial system. So far officials have refrained from resorting to a large-scale bailout, putting the government’s 5 per cent growth target at risk.

The fresh round of stimulus may help limit the housing sales decline from further deepening, but is unlikely to revive it, Bloomberg Intelligence property analyst Kristy Hung wrote in a Monday note. Bigger cities with room to loosen lending requirements make up just 31 per cent of new-home sales. The magnitude of the sales decline – 34 per cent in August – is likely to persist through the end of this year, she wrote.

Sales turnaround for small cities might not be that strong, CIMB’s Cheng added. BLOOMBERG