First-time homebuyers and upgraders on the mainland are taking advantage of lower borrowing costs during the market downturn, with flats sold out on the first day of launch at a new project in Shenzhen. Property agents said they believed last Friday's surprise rate cut could stimulate buying but a full recovery of the ailing property market was still some way off. On Saturday, when the Qianhai Shidai project was launched in Shenzhen's Qianhai, it sold all 675 units at an average of 42,000 yuan (HK$53,000) per square metre the same day, according to the mainland's largest property website, Soufun. "The rate cut has encouraged buying demand as some cautious potential buyers who were waiting on the sidelines have now decided to act," said Kenneth Pak Kei-yuen, a general manager at Midland Realty's Beijing office. Developers are the major beneficiaries of the latest rate cuts. Project launches such as Qianhai Shidai have been attracting long queues the first weekend after the People's Bank of China cut the benchmark lending rate for the first time in more than two years. The central bank cut the one-year benchmark lending rate by 40 basis points to 5.6 per cent and the one-year benchmark deposit rate by 25 basis points to 2.75 per cent. Pak said he expected home sales in the secondary residential market to pick up in coming weeks as upgraders searched more actively for bigger flats. "[The rate cut] is very positive for the housing market as it will lower the borrowing cost for homebuyers as well as developers," said Edison Bian, an analyst at UOB Kay Hian. As an illustration, Bian said a person who bought a flat for 1 million yuan by taking out a 70 per cent, or 700,000 yuan, mortgage loan for 20 years at a benchmark rate of 6.55 per cent could save 300 yuan a month as a result of the rate cut. "Over the weekend, we have been seeing upgraders and first-time buyers rushing to the market hunting for new launches. Home prices in Shenzhen, Beijing and Shanghai are on track for strong recovery and expected to surge as a result of the rate cut," he said. More than 2,000 potential buyers queued up for Qianhai Shidai when the flats opened for sale on Saturday, according to Soufun. Pak said sales of second-hand homes in Beijing had surged 58.9 per cent to 7,529 units so far this month, compared with the same period last month. But the rebound is still far below the average 15,000 monthly transactions prior to the central government's decision four years ago to impose a slew of cooling measures to curb the then scorching property market. Pak said he expected average home prices in the secondary market to increase to 29,000 yuan per square metre next month, from last month's 28,000 yuan. Fu Wai-chung, the chairman of Hopefluent Group Holdings, which operates 280 outlets across the mainland, said he believed the transaction volume would rebound but ruled out any significant rise in home prices. "We have seen stabilisation in the housing market after the government scrapped home buying restrictions and the central bank relaxed mortgage policies in September," Fu said.