Real estate prices fell in March in 46 of the 70 cities reviewed, up from 45 in February. Prices were stable in 16 cities and rose less than 0.2% in eight cities. First-tier cities including Beijing, Shanghai, Guangzhou and Shenzhen were among those that saw their prices decline for six consecutive months. Alan Jin, Analyst at Mizuho Securities Asia, said prices would continue to fall for a few months. “Developers will continue to have a tough time ahead, though most likely it will not be as bad as late last year,” Jin said. “But developers are also adapting within the tight policy framework. They have set conservative sales targets, scaled back construction activities and cut prices. A number of Hong Kong-listed developers have tapped the capital market, while relatively smaller plays are having a tougher time than the big ones.” Fueled by the price cuts and discounts on mortgage interest rates for first-time homebuyers, sales rebounded sharply last month. Bank of America Merrill Lynch said sales of new homes in 14 key cities it monitored climbed 53% to 2.4 million square meters for the week to April 15. However, sales in first-tier cities are down 17% on a year ago, and the volume in the 10 top tier-two cities was down 1%, it said. The statistics bureau said prices for new homes in Beijing fell 0.4% last month from February, while in Shanghai they dropped 0.2%. In Wenzhou, prices were down 1.1% month on month.

Prices of new homes in Beijing fell 20.7% year-on-year in the first quarter to CNY12,326 per square meter, as property developers offered more discounts. According to Chen Zhiwu, Secretary General of the Beijing Real Estate Association, 16,000 new apartments were sold during the first quarter, with 90% of buyers being first-home purchasers. Apartment sales (excluding subsidized units) fell 14.2% year-on-year in the first quarter, reaching the lowest level since 2007, Chen added. But as developers offer more attractive discounts, potential buyers’ interest has grown. During the just-concluded four-day Beijing Spring Real Estate Expo, developers offered discounts from 2% to 8%. April is a traditional hot season for property sales, but as the market is still quite price-sensitive, and as restrictions on home purchases remain in effect, we are not likely to see a rebound in both sales and prices, said Zhang Dawei, Marketing Director of Centaline Group in Beijing.

Office rents in Beijing, which already outpaced 147 cities around the world last year, are expected to jump another 30% this year due to limited supply and growing demand, according to property consultant DTZ. The company said the average rent for grade-A offices in Beijing rose to CNY277 per square meter per month in the first quarter, up 12% from the previous quarter and 48% higher than a year earlier. “This strong growth will continue till 2015, as the premium office supply will not be able to catch up with the increasing demand,” said Wei Dong of DTZ. The office occupancy cost in Beijing increased 38% last year, the largest leap seen in a survey of 147 cities globally, according to a DTZ survey. Soaring rents have been fueled by a widening gap between supply and demand over the past two years. DTZ estimated that Beijing would have 330,000 sq m of new office space this year, but the demand for space was expected to exceed 500,000 sq m. Wei added that the proportion of domestic companies in premium offices in Beijing had climbed to 49% from 25% over the past three years, although that trend might reverse from this year.

Land sales dived in Shanghai in the first quarter of this year on slack sentiment among real estate developers. Sales of land parcels totaled CNY6.82 billion in value, plunging 80% from the same period a year earlier and a drop of 79% from the fourth quarter of 2011, according to Soufun.com. In volume, about 956,000 square meters of land plots were sold, a year-on-year retreat of 74% and declining 61% quarter-on-quarter. On the supply side, only 18 parcels were launched for sale in the city between January and March, compared with 73 plots introduced in the same period a year earlier.

Evergrande Real Estate aims to maintain 20% to 30% growth in contracted sales and profit in the next three to five years, building on its achievements since it listed in Hong Kong two years ago. Chairman Hui Kayan said the developer had recorded an average growth of 60% to 70% since it listed in November 2009. Evergrande also hoped to maintain gross profit margin at 30% to 40%, said Chief Financial Officer Tse Wai-wah. Gross profit margin climbed to 33.3% last year from 29.2% in 2010, while the developer’s net profit margin rose two percentage points to 14%. Evergrande announced underlying profit, excluding property revaluation gains, jumped 56.3% to CNY8.61 billion from CNY5.51 billion in 2010. Turnover increased 35.2% to CNY61.92 billion, thanks to strong growth in property sales. Net profit soared 50% to CNY11.38 billion. The company completed a gross floor area of 11.34 million square meters last year, up 26% from 8.99 million sq m previously. Contracted sales grew 59.4% to CNY80.39 billion, while average prices rose 3.1% to CNY6,590 per sq m. The company expanded into 103 cities while its land bank grew 42.5% last year to 136.8 million sq m, the South China Morning Post reports.