Shenzhen real estate Photo:VCG

The value of China's residential home sales rose by 11 percent  over the first four months of 2023 while the real estate investment growth extended its decline, according to data released by the National Bureau of Statistics on Tuesday.

The national housing business index rose 0.06 percentage points to 94.78 in April, which is the fourth consecutive month of recovery.

Positive changes have been seen in the real estate sales data. In the January-April period, the floor area of commercial housing sales fell by 0.4 percent year-on-year, 1.4 percentage points fewer than the January-March period.

In the first four months of the year, China's real estate sales rose 8.8 percent by value from a year ago, 4.7 percentage points faster than the January-March period. Of note, the total area of residential floor area sold increased by 2.7 percent and  home sales by value spiked by 11.8 percent from a year ago, both accelerating from the first quarter. 

It shows that efforts taken in the first quarter to stimulate reasonable housing consumption demand is taking effect, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Tuesday.

As China continues to accelerate the implementation of key projects and the policies to stabilize the property market , confidence is gradually recovering, Zhou Maohua, an economist with China Everbright Bank told the Global Times on Tuesday.

While the latest market signals are encouraging, the growth rate of investment in real estate development continued to stagnant. 

Investment in real estate development was 3.55 trillion yuan, down 6.2 percent from a year ago, extending from the 5.8 percent drop in the first three months. The total investment in residential buildings was 2.71 trillion yuan, down 4.9 percent from a year ago.

"Although the improvement on the sales side has improved the capital of real estate enterprises through down payment and mortgage loans, more efforts are needed to tackle long time lag in the land acquisition and construction of real estate enterprises," Yan said.

Fu Linhui, spokesperson of the NBS said that the overall real estate market is in a period of adjustment, and continued efforts are needed to stabilize the real estate market and ensure and improve people's livelihood.

In the next stage, as the economy recovers, the policies to stabilize the real estate market take effect and market expectations improve, the real estate market is expected to gradually stabilize, Fu said.

This year's government work report said efforts will be made to prevent unregulated expansion in the real estate market and promote stable development.

Policymakers have rolled out a flurry of supportive measures to shore up this sector, including encouraging commercial banks to grant loans to fund real estate projects and allowing cities to adjust the lower limit for first-home mortgage rates.