Beijing, Shanghai home sales pick up after May 17research firm
Smaller cities struggle to revive demand agents
Excess supply, fears of undelivered projects keep buyers away
More support likely, but recovery to be LshapedGoldman Sachs

BEIJINGHONG KONG, June 18 Reuters China39;s latest property support measures have boosted transactions in its biggest cities, but activity in smaller localities is struggling to get off the ground, pointing to more pain ahead for most of the country39;s real estate market.

On May 17, China cut minimum mortgage rates and downpayments and instructed municipalities to buy unsold apartments to turn them into social housing, sparking dozens of announcements from cities easing policies under the new guidelines.

Small samples of transactions data and interviews with 10 real estate agents across China show the measures had an uneven impact throughout the country, reviving demand in megacities such as Beijing and Shanghai, but not in smaller places.

This adds to concerns fuelled by poor home prices data on Monday that the downturn may have further to run, especially in the smaller cities where the quantum of excess supply is far greater than in larger cities, keeping pressure on policymakers to extend more support.

The depressed property sector, which contributed nearly a fourth of gross domestic product before it slipped into crisis in 2021, remains a major drag on the 18 trillion economy.

For large cities, policies are more effective…