A countrywide surge in sales since the beginning of the year has injected a sense of optimism that the worst is over for the mainland property market and a sustainable rebound is under way. The market improvement was proven by inventory depletion as well as price stability in some cities, analysts said. While optimists said home buyers had regained confidence after the government's stimulus package including falling mortgage loans and lower transaction tax expenses, some said the rebound was spurred by pent-up demand and bargain prices. They were also concerned that prices were not following deal volumes higher. 'It is definitely a sustainable volume recovery,' said Lee Wee-liat, a property analyst at investment brokerage Nomura International HK. Mr Lee based his call of a rise in demand since February - following a short-term rebound by the end of last year - on data compiled by Nomura showing a widespread surge in deal volumes nationwide last week. The number of property deals was up on the previous week's sales by 24 per cent in Beijing and Tianjin, and 71 per cent and 19 per cent higher, respectively, in Qingdao and Dalian, the data found. In Shanghai, 19 per cent more properties changed hands. Guangzhou and Shenzhen recorded slight volume declines on the week, Mr Lee said, but remained at around the highest levels seen in the two cities for two years. The increasing pace of sales was beginning to reduce unsold housing inventory, he said. The rising trend is also supported by research from consultancy DTZ. Total sales volume in first-tier cities in January and February was up 34.5 per cent year on year with Beijing recording an increase of 27.5 per cent, Shenzhen 169 per cent, and Guangzhou 61.1 per cent, DTZ said. Beijing's inventory was down 8 per cent from last year's peak level, while Shanghai's unsold housing stock was down 8 per cent and Hangzhou's inventory was 16 per cent lower, Mr Lee said. Some analysts, however, said the sluggish response to the increased deal volumes shown by prices would affect the calling of a definite end to the downturn, particularly in Beijing. Those who urged caution said the jump in deal volumes could also have been caused by the release of long pent-up demand and bargain prices. However, Mr Lee is convinced the turning point has been reached. 'Many people had been worried that the steady increase in deal volumes could run out of steam as we entered March and April because by then sales campaigns would have exhausted pent-up demand. 'There was no sign of this last week,' he said. Prices have also shown signs of stabilising in cities such as Guangzhou, Shenzhen, Dalian and Ningbo. For example, developer Everbright Real Estate sold 250 units at Guangzhou Everbright Garden in the first three hours of public sale on Sunday, despite an increase of about 8 per cent on prices offered in a sale a month ago. 'The short-term rebound towards the end of last year was boosted by central government and local authority stimulus measures. This time it is different,' said David Ng, the head of regional property research at ABN Amro Bank. In the absence of new measures, sales activity continued to pick up, noted Mr Ng, who expected a reasonable price level in each city would be 20 per cent below their peaks. Cities that had not yet recorded such falls could see prices continue to retreat. Developers also shared similar cautiously optimistic views. China Overseas Land & Investment chairman Kong Qingping on Monday said the market would show an improvement over last year, though the recovery would be patchy across the country with prices in the Pearl River Delta region, where values had plunged 30 to 40 per cent from their peaks, likely to recover faster than in other cities. He Jiangchuan, the chairman of Beijing North Star, the property arm of the Beijing local government, said the city's rebound in transactions over the past few months did not mean the property market had hit bottom. Data released by property firm CB Richard Ellis in Shanghai show prices of luxury residential properties fell during the first quarter in all key mainland cities except Nanjing, where they were up just 1.7 per cent, and Xian, which saw prices gain 0.7 per cent. The biggest drop was in Shenzhen, where prices of luxury apartments were down 6.4 per cent on the previous quarter. Greg Penn, the senior managing director for investment property at CBRE, said a slight upward trend had been seen in transaction volumes as the fall in prices had increased domestic and international interest. 'We are seeing a rise in activity following Lunar New Year,' he said. 'A number of sellers are meeting market expectations. They are lowering prices to ensure liquidity in the market.'