Secondary market sales in big mainland cities saw explosive growth last month, with transaction volume in Shenzhen reaching a record in terms of space sold. The surge in sales was the combined result of capital flooding into the real estate market to hedge against wealth erosion as signs of inflation emerged, and the release of pent-up demand after the Lunar New Year break, property agents say. Andy Lee Yin-chi, general manager of estate agency Centaline's China office, said March transaction volume in the secondary market surged fourfold from the previous month's sales, to close on 1.9 million square metres. 'That is the highest level I have ever seen in terms of saleable area,' he said. Recent talk of the possibility that authorities might allow the yuan to appreciate further was also boosting investor buying interest and driving home prices higher as speculators bet on foreign funds pouring into the market. 'Our firm closed an average of 140 deals every day last month, 40 per cent higher than last year,' Lee said. Investors accounted for as much as 60 per cent of the total transactions, as indicated by the fact that sales were dominated by luxury market deals priced at above four million yuan (HK$4.54 million). In Shenzhen, prices rose an average of 10 per cent last month from February. 'Clement Luk, Centaline's chief executive for eastern and northeast China, said both the primary and secondary residential market had turned buoyant in the final week of March. He believes many home-seekers had decided to buy now as they were worried the central government would change home-lending policies as a way to curb speculation.