Due to the impact of COVID-19 outbreaks, weak market expectations and tepid demand, Chinese real estate developers' sales revenues were more than halved in the first six months. However, as the contagion is gradually being contained in major Chinese cities and home sales are progressively improving, property developers are expecting a better second half.

Data collected by various research organizations all showed that the nation's top 100 property developers' sales revenues from January to June shrank by more than half from a year ago, and they are feeling great pressure in the second half to meet their annual sales targets.

In comparison with the same period last year, China's 100 largest real estate developers' accumulated sales revenue tumbled 50.3 percent to 3.06 trillion yuan ($452.3 billion) in the first half, said E-House (China) Enterprise Holdings Ltd.

"Among those listed property firms that have announced their annual sales goals, most of them have accomplished less than 40 percent of their annual targets as of the end of June, while nearly half of them have barely reached 30 percent," said Ding Zuyu, CEO of E-House (China).

Factors including insufficient market confidence, a growing wait-and-see attitude, and the impact of COVID-19 to weaken home-buying demand contributed to the sales slump, according to Ding.

A report from the China Index Academy suggested the same trend as 85 property developers saw their first-half sales revenue surpass 10 billion yuan, 47 less than that of last year, and the number of developers with half-year sales above 100 billion yuan was merely nine, compared to 19 a year ago.

Average sales revenue of the top 100 developers shrank 48.6 percent to 35.64 billion yuan in the first half, the China Index Academy report added.

But the June figures bode well for an encouraging second half.

Sales revenue of the nation's biggest property developers soared 61.2 percent to 732.97 billion yuan in June, showed China Real Estate Information Corp's (CRIC) calculation.

Such a large percentage improvement showed the market retreat has bottomed out in a short period, though the complete recovery of the sector may be a gradual and mild process, said Yu Liang, chairman of China Vanke, during a shareholders meeting in late June.

In a bid to promote the real estate sector's healthy development, the central government, together with local governments, has introduced a series of policy fine-tuning in the past few months, with pent-up demand due to COVID-19 outbreaks recovering a bit in June. Furthermore, the efforts developers have made in increasing supply and improving marketing have also helped the market warm up in June, according to Yu's reading.

Along with the improved policy environment for the real estate industry, large-scale property developers need to further accelerate their supply and actively conduct marketing to keep their objectives in check, Ding added.

"In the past few months, we have seen a variety of property measures launched. Most of them are aimed at supporting rational demand, and others are about the land market. But there is a missing piece, which is targeting property developers' financing," said Chen Sheng, president of the China Real Estate Data Academy.

For developers, in order to maintain a benign circle of capital balance, they should ensure that every single property project's capital can flow smoothly from financing and construction to sales and delivery, Chen said.

Especially against the backdrop of mortgage loan turbulence, the credibility of a property developer will become more important than ever in the eyes of homebuyers, Chen added.

Chen was referring to the occurrence of a certain amount of homebuyers who have refused to make mortgage payments due to the delayed deliveries or suspended construction of their pre-sold homes.

Hui Jianqiang, head of research at Beijing Zhongfang-Yanxie Technology Service Ltd, agreed and called the refusal to pay mortgage loans "a warning signal" to all property developers.

It's an urgent task to keep normal financing and maintain smooth capital flow to ensure their existing projects get constructed and are delivered on time, Hui said.

Lian Ping, chief economist and head of the Zhixin Investment Research Institute, expects that developers' capital is going to be better off, and it will help the improvement of new investment and construction in the second half.

"Once the impact of the pandemic fades, both residential property sales and home prices will rebound. In that case, developers' capital flow will improve, and property development investment will increase as well," Lian said.

In a bid to achieve stable and healthy development, property enterprises should on the one hand tap into different markets with high-quality products and services, and on the other hand optimize their capital flow and ensure management for high-quality development, industry experts suggested.