Credit easing, lower down-payments and tax cuts fuelled 20% and 23% yoy growth in contracted sales in China's housing market in the first two months of 2016, respectively. Demand was strong from Tier 1 and some Tier 2 cities, Fitch Ratings says in its latest China Property Watch.

Two thirds of the 70 major cities reported new home-price increases in February 2016, led by Shenzhen and Shanghai, which were up 4% and 3% month-on-month, respectively. The gross floor area sold exceeded the amount started, despite signs of bottoming out in new-home construction.

Most Fitch-rated Chinese homebuilders reported strong contracted sales growth yoy in January and February 2016. Chinese developers' onshore bond issuance surged almost five-fold yoy, in contrast to shrinking offshore issuance.