(Yicai) Aug. 20 -- Several Chinese property developers have quietly withdrawn their discounts on some well-received projects in Guangzhou, as the first-tier city’s new home market has entered a recovery phase.

Poly Developments and Holdings Group has removed the 2 percent discount on the remaining housing units of Poly Yunrui in Guangzhou’s Baiyun district, after more than 90 percent of the project’s about 200 houses that hit the market at the end of June were sold immediately after launch. 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 home project in July, when the contracts with the buyers were signed, in terms of transaction volume, area, and value.

Some new home projects have recently rolled back discounts of 1 percent to 2 percent for buyers, a senior real estate agent told Yicai. Even though the actual selling prices of most new home projects in Guangzhou remain below the filing prices submitted by builders to regulators, many projects have launched “disguised price increases,” other local industry insiders said.

Broad price declines have ended in Guangzhou’s residential property market, said Xiao Wenxiao, chief analyst for the Guangzhou-Foshan region at real estate think tank Purui Digital Intelligence Technology. The practices of canceling discounts and introducing low-key price hikes when launching new batches of housing units at popular projects reflect improving developer confidence, he added.

New home prices in Guangzhou 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 high-quality projects have raised the prices of newly released houses, mainly because of strong sales of earlier offerings, but also because the remaining units are in better locations, Chen Xueqiang, research director at the Guangzhou branch of the China Index Academy, told Yicai.

Moreover, the land auction market in Guangzhou has heated up in the past two months. Several high-quality plots were sold at high premium rates, lifting expectations for price hikes among developers of popular projects in surrounding areas, Chen noted.

Most projects will stick to stable pricing going forward, with trading volume expected to gradually pick up, Chen said. Market divergence will persist nevertheless, with premium projects in core districts holding firm prices and enjoying fast inventory digestion, and less competitive projects in peripheral areas continuing to rely on discounts and other promotions to drive sales, he explained.

Editors: Tang Shihua, Futura Costaglione