The China Developers Sentiment Index, an index developed by Standard Chartered Bank based on its quarterly survey of 30 mainland developers, indicated continuing expansion in the fourth quarter of 2012.

The developers' expansion appetite is returning, with land purchases up. In both the primary and secondary land markets, bigger developers are getting even bigger at the expense of smaller firms, the bank said in a research note on Monday.

"Construction activity is set to pick up in the next few months. The de-stocking of apartment inventories continues, though the pace varies across cities," said Stephen Green, an economist with the bank.

Developers expect home sales to be even better this year than in 2012, and apartment prices to rise moderately, he added.

The majority of developers also expect central government policies to remain unchanged, while counting on easier financing conditions and more flexibility in local policy implementation, according to the survey.