(Yicai Global) April 3 -- China’s real estate market is in a stage of mild recovery, but there will be no fast bursts nor stagnation, according to the chairman of China Vanke, one of the country’s top three developers.

The property market is performing better than last year and shows no signs of a slowdown, indicating that it is on an upward trend, Yu Liang said at the Shenzhen-based company’s earnings call on March 31.

Real estate sales in the bigger first- and second-tier cities climbed a moderate 7.2 percent in the first two months from a year ago, even though February saw a big jump in sales from January, Yu said.

Although weekly transactions have slumped 6 percent since early March from February’s peak, they are still better than most of last year, and there was no significant pullback in March which some analysts had been concerned about, he added.

There is still a strong, basic need for housing although there is unlikely to be big jumps in demand like before as the average per-capita floor area for urban residents has already reached 40 square meters, said Yu. Nationwide annual demand may stay around 1.2 billion square meters for some time.

“It is normal for the market to fluctuate, and Vanke must follow the main trends,” Yu said. The property sector should not only rely on residential developments. Vanke will focus more on the integration of development, operations and services while at the same time keeping above the red safety line.

In the long-term, Vanke’s revenue from services is expected to grow and contribute more to the company’s overall performance,  and the growth rate of this sector this year is expected to reach double-digits, Yu said.

Vanke’s net profit edged up 0.4 percent in 2022 from a year earlier to CNY22.6 billion (USD3.3 billion), according to the developer’s financial report published on March 30. Revenue surged 11.3 percent to CNY503.8 billion (USD731.4 billion). The company sold 26.3 million square meters of real estate last year, but the sales value tumbled 33.6 percent from a year ago to CNY417 billion.

Editors: Tang Shihua, Kim Taylor