China's real-estate recovery is gathering steam.

Developers' expansion appetite is returning and land purchases are up. Governments have responded in turn by providing more land. Land prices have bottomed out and now look set to rise moderately in the next three months. Construction activity is set to pick up.

Meanwhile, apartment sales are rising in many cities on the back of strong demand, price cuts and a shift in sentiment. Developers expect home sales to be even better this year than last, mainly supported by real demand in bigger cities. The destocking of apartment inventories continues, although the pace varies across cities. Inventories are, however, a problem in some smaller cities, where sales have not recovered as quickly.