Policy measures for realty taking effect

China's top 100 developers recorded combined sales of 1.44 trillion yuan ($199 billion) from January to May, a 10.8 percent year-on-year decline, according to the latest data from real estate market consultancy China Index Holdings.

The contraction remained largely unchanged from the first four months of this year, with only a marginal 0.6 percentage point narrowing, underscoring the continued challenges faced by the sector.

The monthly data also revealed an intensifying downward trend, with May sales alone falling 17.3 percent year-on-year, a 0.5 percentage point wider decline compared to April.

The gradual deterioration in sales performance came despite some variations across different tiers of developers.

While firms ranked 31-50 managed to limit their sales decline to 3.6 percent, other segments saw more pronounced decreases, particularly those ranked 51-100 where sales plummeted by over 15 percent, according to the CIH data.

In addition, market concentration appeared to be increasing, with 33 developers maintaining sales above 10 billion yuan, matching last year's performance in the same period.

Within this group, the number of developers surpassing 50 billion yuan actually increased by one to eight, while those crossing the 5 billion yuan threshold fell by six to 64, highlighting how larger developers are demonstrating relative resilience even as their smaller counterparts face growing operational pressures in an increasingly competitive environment.

Despite persistent market headwinds, there are also emerging signs that supportive policy measures and sales strategies are starting to take effect.

Real estate information provider CRIC data showed that more than half of leading developers saw month-on-month sales improvements in May, with 22 firms posting gains of over 30 percent. Several major players such as Greentown China and China Jinmao achieved both year-on-year and month-on-month growth.

The rising signs of stabilization come against a backdrop of significant policy easing.

In May, the People's Bank of China, the country's central bank, implemented a comprehensive monetary easing package, including a 50-basis-point cut to the reserve requirement ratio and a 10-basis-point reduction in the policy interest rate, with the current 5-year loan prime rate adjusted downward from 3.6 percent to 3.5 percent.

Looking ahead to June, CIH expects the current policy loosening to continue, potentially bolstered by developers' midyear sales pushes.

"With the midyear sales season approaching, developers are expected to accelerate project launches and intensify promotional efforts," it said.

While core cities may sustain their recovery momentum, market divergence across different cities and between new and existing projects is likely to persist, CIH said.