Property prices are now well on their way to recovery, if one were to judge the crowds at Beijing Spring Real Estate Trade Fair on Wednesday.

The bustling crowds reminded Chen, a 29-year-old property salesman of the golden days in 2007, when property prices in the capital saw a two-digit growth every month.

Sino-Ocean Land, the company Chen works for, has just raised the unit price of a project by 1,700 yuan to 13,500 yuan per sq m, believing the market is back on the road to recovery.

According to statistics from Beijing JiaHua Four Season International Exhibition Co Ltd, the sponsor of the spring expo, around 35,000 people attended the expo yesterday. Nearly 437 apartments with an average unit price of 11,800 yuan per sq m were sold on the first day of the fair, compared to 120 units at an average price of 11,419 yuan per sq m in the autumn fair last November.

For many like Zhang the fair was a disappointment. The 40-year old lady spent nearly an hour at the fair searching for an apartment for her son.

"My budget is 1 million yuan, and I could not find any in that range. The current unit price is expensive for me," said Zhang, adding she will probably continue to wait and watch.

According to property transaction websites in Beijing, Shanghai and Shenzhen, the sales of new residential buildings in the first quarter rose by more than 100 percent on a yearly basis. Transaction volumes in Beijing and Shanghai have nearly reached the peak levels of 2007, the best year for Chinese property developers.

Industry analysts, however, still remain conservative on the market.

Gu Yunchang, vice chairman of the China Real Estate and Residential Buildings Institute, said whether the ongoing market recovery can continue or not is still a question mark.

"The current sales rebound mainly comes from small- and medium-sized apartments with an affordable total price, showing the market is still driven by the self-use demand rather than improvement-oriented or investment-oriented demand," said Gu.

Denis Ma, head of Research of Jones Lang LaSalle (JLL) Beijing, also sees the rebound as a short rally.

"People are still pretty price-sensitive, and the rebound in sales has been fuelled by a sharp price cut," said Ma. "I believe a full recovery would happen only in the second half of 2010."

(China Daily April 9, 2009)