Property investments in China are still bad for April but far better than they were in February and March indicating a continuation of the recovery from the plummeting sales wrought by COVID-19 that began in March.

Property investments surged 7% in April compared to a paltry 1.2% in March, according to Reuters based on data from the National Bureau of Statistics (NBS). The downside is that despite the April jump, total property investments from January to April are still 3.3% lower year-on-year. Property investments, which comprise residential housing, offices and other commercial buildings, plummeted 7.7% in the first quarter.

Analysts concur China's property market remains a key driver of the country's growth despite being one of the hardest hit by COVID-19 and its harsh social distancing measures. Property sales and new construction starts for April, while in the negative, were also improvements over March but were lower overall for the first four months of the year compared to 2019. Property sales plummeted 2.1% measured by floor area compared to 14.1% in March.

It was still 19.3% lower in the first four months of the year. This was mostly due to the market freeze in January to February when national lockdowns paralyzed business and kept potential buyers away from showrooms. On the other hand, new construction starts measured by floor area only slid by 1.3% year-on-year compared to a 10.4% plunge in March.

Funds raised by China's property developers dropped 10.4% from January to April. While disappointing on its face, the figure is better than the 13.8% drop from January to March.

UBS concurs with the bleak performance of the property sector from January to March. Its latest UBS Evidence Lab China housing survey conducted April shows China's total property sales volume dropped 26% in the first quarter. The good news is property sales in 30 major cities are close to their levels in 2019 in early May.  Despite this, property sales will likely drop from 5% to 7% in 2020, said UBS.

The report said the COVID-19 pandemic simultaneously hit property transactions and severely reduced that part of the household income that should have gone to buying property. The pandemic also saw a loss of confidence in the property market.

The loss in buyer enthusiasm can be gleaned from data showing only 3,322 respondents to the UBS report admitted to an intention to buy property over the next two years, a large 21% drop. The UBS survey also shows almost 80% of respondents that originally had home purchase plans in the next two years decided to delay or cancel their plans.