BEIJING, July 15: Growth in real estate investment in China slowed in the first half of this year, dragging on the broader economy, while property sales cooled but were still at relatively high levels due to strong housing demand.
Real estate investment, which affects more than 40 other sectors from cement and steel to furniture, rose 20.3 percent in the first half of 2013, slowing from an annual increase of 20.6 in January-May, the National Bureau of Statistics (NBS) said on Monday.
Growth in revenues from property sales in the first half eased to 43.2 percent from a rise of 52.8 percent in January-May, but remained robust, the NBS said.
‘We are especially concerned about the rather significant downside of investment growth, led by real estate investment,’ Ren Xianfang, senior economist at consultancy IHS Global Insight in Beijing, said in a note to clients.
The relatively strong home sales in the first half of this year and previous credit support have enabled developers to replenish their land banks and quicken rates of construction.
Construction starts rose 3.8 percent in the first six months of 2013, improving from an increase of 1 percent in the January-May period, the NBS data showed. For a full table, see.
Total land area bought by developers fell 10.4 percent in the first six months from a year earlier, easing from a drop of 13.1 percent in the first five months.
China’s near four-year-old campaign to temper home prices has been partly undone by continuing rising home prices and a rush of efforts by local Chinese governments to sell land to raise much-needed revenues.
Recent buoyancy in land markets in tier 1 cities – typically a prelude to home price increases – will reinforce market expectations that prices remain on an upward trend.
China’s property inflation moderated slightly in June on a monthly basis, private surveys showed, but year-on-year gains in home prices quickened as strong demand coincided with a tight supply of homes and land in top cities.
The government unveiled a fresh round of measures in March to try to cool the sector, but they were less stringent than market expectations and their implementation has been spotty across the country so far.
China’s economic growth slowed in the second quarter to 7.5 percent year-on-year as weak overseas demand weighed on output and investment, other data showed on Monday, setting up a test of Beijing’s resolve to revamp the economy in the face of deteriorating data.
(agencies)
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