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China home sales rebound in March
CHINA'S property market is showing signs of green shoots again with home sales posting a robust recovery in March.
After contracting in the first two months of 2019 - including over the Lunar New Year holiday, a time when at least for the past three years residential purchases have typically been buoyant - the project sales of nine major developers rose 20 per cent in March from a year earlier.
Aiding the recovery has been stimulus from Beijing, which has helped stabilise the economy and re-ignite home buyers' enthusiasm.
Economists expect the central bank will cut reserve requirements at least three more times this year to funnel cash into a slowing economy.
Additional so-called stealth easing measures that make it easier to buy property in China have also improved sentiment.
A nationwide promotion with sweeping discounts resulted in China Evergrande Group posting a rise in contracted sales of 11 per cent last month, reversing the company's 42 per cent year-on-year slump in the first two months. At Shanghai-based Cifi Holdings Group, March sales were up 87 per cent.
Bloomberg calculations based on official data also show that home builders received faster cash proceeds from banks in January and February.
In China, when home buyers take out a mortgage, that money flows to the project developer.
When liquidity worsens, developers receive those proceeds more slowly. Analysts at Credit Suisse Group say such signs of recovery are just the start.
On Tuesday, the bank said that it expects home prices nationwide to increase by 1.4 per cent on average in 2019 and 2.3 per cent in 2020, and reckons developers with quality land banks should outperform. BLOOMBERG