– This is the script of CNBC's news report for China's CCTV on February 24, Wednesday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Tax cuts and lower borrowing rates have made the Chinese property market a silver lining of China's economy.
For the past year, property prices were rising fast in mega cities like southern Shenzhen, where prices rocketed by nearly 47 percent, Shanghai, up a healthy 15.5 percent, and Beijing, which posted a respectable 8 percent gain.
The government has pledged to reduce home inventory as one of its key tasks in 2016.
In reducing the taxes, China has been seeking ways to dissolve a glut of unsold homes. While the authorities' supportive stance to the property market is known to the market, the frequency of such measures has been prompting optimism that the government will boost stimulus more strongly.
After six interest-rate cuts since November 2014, China on Feb. 2 said it will allow banks to cut the minimum required mortgage down payment to 20 percent from 25 percent for first-home purchases in areas without purchase restrictions, while the minimum down payment for second-home purchases was cut to 30 percent from 40 percent.
However, as one analyst pointed out, despite the increasing sales, China's property market is becoming more uneven.
[FRANK (t) CHEN, CBRE Executive Director and Head of Research, China] "134949 For lower-tier cities, like the tier3 and 4, I think the high inventory level will stay there for a long time, I think its going to help a little bit, but not much. But for tier 1 and 2 cities, those will be key benefeciary of this kind of policy easing. 135009"
If we take a look at the invetory data last year in China.
By the end of 2015, China's unsold commercial and residential real estate reached 718 million sqm. That is a 15.6% increase from one year ago.
Meanwhile, growth of property investment eased to 1% in 2015, falling to the slowest level in nearly seven years.
On the other side, data showed that inventory cycle of China's tier 1 cities all have fallen to less than 10 months, while invetories in tier 3 and 4 cities might take a few years to digest.
Therefore, according to analysts, we might see more policies diverging among different cities.
[FRANK (t) CHEN, CBRE] "135132 if some property companies they are more focused on tier 1, 2 cities, I think at this stage, it looks more promising at least. They still have quite strong demand of their products, but with key focus on lower tier cities, I think there might face some uphill battle. 135149"
CNBC's Qian Chen, reporting from Singapore.