(Yicai) June 4 -- The number of second-hand houses newly listed for sale in 25 key Chinese cities significantly declined last month, which is a sign of recovery in the market due to homeowners taking a wait-and-see approach in expectations for prices to grow, according to experts.

"The decline in new listings of pre-owned houses is a positive signal that the market's supply and demand dynamics are shifting in a favorable direction," Yan Yuejin, deputy head of Shanghai-based E-House China Research and Development Institute, told Yicai. Reasons for this include improved expectations for future prices, which make homeowners more reluctant to sell, he noted.

The recovery in pre-owned house sales has reduced homeowners' urgency to exit the market, Yan noted.

The number of newly listed pre-owned homes in the 25 cities plunged by about 41 percent to 120,000 units last month from a year ago, according to data released by the China Index Academy. Relevant sales in 20 key cities topped 141,000 units in May, down 9 percent from the previous month but up 19 percent from a year ago, with the year-on-year growth rising from 13 percent in April.

The number of newly listed second-hand homes for sale in the 25 cities reached around 1.98 million units last year, or an average of 165,000 units per month, China Index Academy data showed. The total number of listed pre-owned properties topped 2.13 million units as of April 30, down 1.6 percent from March 31 and 4.3 percent from a peak last October.

New listings in key cities have been on a downward trend since March, primarily due to improved expectations of sellers for future prices, Cao Jingjing, general manager of China Index Academy's index research department, said to Yicai.

The second-hand home market in key cities has seen active sales so far this year with stronger sustainability compared to the same period in previous years, Cao said. Coupled with relatively firm prices, including the average price in Shanghai rising for three straight months, these factors have reinforced homeowners' reluctance to sell, Cao stressed.

In addition, new real estate policies in Shanghai and Shenzhen lowered requirements for non-local residents to buy homes, leading to a drop in second-hand house owners' willingness and urgency to sell at current market prices, Cao pointed out.

The decline in the number of second-hand home listings in key cities has led to prices of such properties in some residential communities to rise.

The average price for second-hand homes in Beixin Jiayuan residential quarter in Beijing's Haidian district was CNY50,800 (USD7,505) per square meter last month, up 2.1 percent from April, according to data from a local real estate trading platform. That in Yuexiuyuan residential quarter climbed 1.8 percent to CNY50,100 per sqm.

Editors: Tang Shihua, Martin Kadiev