(ECNS) -- Mergers and acquisitions will increase in China's real estate industry as the country's strict regulations negatively impact small developers, said a report by CBRE, the world's largest commercial real estate services firm.
CBRE's report on the real estate market in the third quarter said M&A activities are expected to be stimulated due to new policies in the financing and land auction market.
The report said home prices surged in 70 major cities being monitored, while local governments in second-tier cities, including Suzhou of Jiangsu Province, Xiamen of Fujian Province, Hangzhou of Zhejiang Province and Chengdu of Sichuan Province, introduced restrictions on house purchases amid concerns of an overheated market.
Sam Xie, head of CBRE Research China, said upgrades in the retail industry and rising business opportunities brought by Chinese millennials helped promote the real estate market in the third quarter.
Xie also said government restrictions in first- and second-tier cities will disqualify many homebuyers from making further purchases and weaken investor sentiment.
