Potential homebuyers take a look at residential housing at a sales center in Yichang, Hubei province, May 23, 2015. The month-on-month price of newly built houses in 100 cities rose in May after falling for months, and 48 cities witnessed a housing price hike, including Beijing, Shanghai, Guangzhou and Shenzhen. [Photo / IC]

Domestic property market saw a turnaround in May due to the easing of the policy and overflow capital from the stock market pouring into the real estate sector to meet investment demand, statistics from China Index Academy's report showed.

According to the report, the month-on-month price of newly built houses in 100 cities rose in May after falling for months, and 48 cities witnessed a housing price hike, including Beijing, Shanghai, Guangzhou and Shenzhen.

As property market started showing recovery signs in March and April, a red hot market momentum was no surprise for many cities. Data from property agent Centaline showed that 194,909 units of urban property deals were signed in the first 24 days of May, an 8.3 percent growth from April.

The average price of newly built properties was 10,569 yuan/sqm in May in 100 cities, a 0.45 percent rise from the previous month, according to the report.

Buildings in some first- and second-tier cities were sold out in a day due to high demand. Li Qiaoling, market analyst with Homelink Real Estate Agency, told chinanews.com that nine buildings in Beijing sold more than 100 apartments individually in May compared to four buildings in April. Statistics also showed that three newly opened buildings in Shenzhen were sold out in a day.

Developers in some cities started testing the market by raising price in small ranges and reducing discounts. According to the report, 44 old buildings on the market in 10 cities have shown signs of price hike while 12 new buildings reported a price rise.

Yan Yuejin, analyst with E-house China, thinks that it's not a good time for developers to raise prices. "Raising price blindly can cause unhealthy competition in the market which will eventually risk losing potential customers." Yan thinks that the price will not rise dramatically in short-term but there's a big chance for an overall price hike in property market.　

Industry insiders believe that the easing property policies, rate cut and RRR cut lately along with demand rise lead to the market to boom in May.

The property market has also attracted buyers with investment demand who shifted their attentions from stock market. " After the stock market fluctuation, investors who have made benefit in the early period will look for a more secure destination to invest their money and property market offers a much safer and stable solution", said Guo Yi, market director with Beijing-based real estate consultancy Yahao.