(Yicai) Aug. 20 -- Some property developers are withdrawing price discounts on some well-received housing projects in Guangzhou, as the market for new homes in the Chinese first-tier city is showing signs of stabilization and selective recovery.

Poly Developments and Holdings Group has ditched the 2 percent discount on the remaining housing units at Poly Yunrui in Guangzhou’s Baiyun district, after more than 90 percent of the 200 units marketed at the end of June sold out instantly. The firm also lifted the actual prices of its two other projects in the city by around 3 percent to 4 percent.

Poly Yunrui was Guangzhou’s best-selling new housing development last month, when purchase contracts were signed, by the number of deals, floor area, and value.

Some new projects have recently rolled back discounts of 1 percent to 2 percent, a veteran real estate agent told Yicai. Even though the actual sales prices of most new-builds in Guangzhou remain below the list prices submitted to regulators, many projects have launched “disguised price increases,” according to other local industry insiders.

Broad price declines in the Guangzhou market are over, said Xiao Wenxiao, chief analyst for the Guangzhou-Foshan region at real estate think tank Purui Digital Intelligence Technology. The willingness to pull discounts, and even quietly raise prices, when marketing popular developments suggests that builders have become more confident about market conditions, he added.

New home prices in the city inched up 0.1 percent in July from June, marking the fifth consecutive month-on-month increase, according to data from the National Bureau of Statistics.

Some premium developments have raised their prices when launching additional units, mainly because the earlier offerings sold well and the rest are in more desirable locations, Chen Xueqiang, research director at the Guangzhou branch of the China Index Academy, told Yicai.

Moreover, Guangzhou’s land auction market has heated up in the past two months. Several high-quality plots achieved high premiums, lifting expectations for higher prices for popular developments in nearby areas, Chen noted.

Most builders will continue to prioritize price stability over aggressive hikes, while the volume of deals increases, Chen said. Market polarization will persist, with premium projects in core districts holding prices and enjoying fast sales, and less competitive projects in outlying areas continuing to rely on discounts and other promotions to drive sales, he explained.

Editors: Tang Shihua, Futura Costaglione