China Vanke, a leading real estate developer, remains confident in the market's moderate recovery trend but warns that the growth of the property industry in China will no longer rely on housing development alone in the long term.

"We will lay equal stress on housing development and operational and service businesses in the future," Vanke Chairman Yu Liang said at the annual results announcement meeting on Friday in Shenzhen, Guangdong province.

Its annual report, released on Thursday, shows the company realized a revenue of 503.84 billion yuan ($73.3 billion) last year, a year-on-year growth of 11.3 percent. Net profit climbed 0.4 percent to 22.62 billion yuan.

Yu said that the current market is still in a moderate recovery stage. "Market confidence has rebounded, bolstered by government policies to support reasonable housing demand and the fall of housing prices."

In the first two months of this year, the sales area in the nation decreased by 3.6 percent, but the declining margin has remarkably narrowed in comparison with the double-digit decline of last year.

As for the housing market's future demand, Yu said the volume already peaked in 2021 but market demand can remain at about 1.2 billion square meters each year, which is the bottom line.

Data from the National Bureau of Statistics show that the sales area of houses in China was about 1.35 billion square meters in 2022, while the figure was 1.79 billion sq m in 2021.

Last year, Vanke delivered over 340,000 new homes and acquired 36 new projects with a total planned estimated gross floor area of 6.902 million sq m.

Considering the circumstances, Yu believes that operational and service businesses will play a more significant role in the future. In 2022, Vanke's operations and service business achieved a year-on-year growth of above 23 percent to 51.26 billion yuan.

Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution, said that the real estate industry's performance in January and February marks a turning point for market confidence and the recovery of the real estate sector.

He estimated the sales area in 50 major cities would increase month-on-month by 18 percent in March and rise 29 percent compared with the same period last year. He, however, reminded that transaction data is still 20 percent less than the monthly average in 2019 and 2021.