China property investment slows, but sales rebound in July
BEIJING, Aug 9 – Chinese property sales rose in July, reinforcing signs of a recovery in the sector even as investment growth slowed to a three-month low due to continuing government curbs.
Real estate investment, which affects more than 40 other sectors from cement and steel to furniture, rose 15.4 per cent in the first seven months of 2012 from a year earlier, slowing from an annual increase of 16.6 per cent in the first half of the year, the National Bureau of Statistics said on Thursday.
Revenues from property sales in the country rose 26.3 per cent in July from a year earlier, surging from a rise of 6.9 per cent in June, according to Reuters calculations. That confirms signs of a recovery already flagged by private sector data and anecdotal reports.
Investment growth could stabilise in coming months, analysts said, as it takes at least three months for rebounding home sales to translate into new investment.
Many developers still hold a lot of unsold inventory.
“Property investment will maintain relatively stable growth in the upcoming months as China’s slowing economy restrains the government from imposing further tightening measures,” said Zhang Xinfa, an economist with Galaxy Securities in Beijing.
Property investment grew 9.6 per cent in July from the same month a year earlier, in only the second single-digit rise since November 2009, according to Reuters calculations based on official data. The first single-digit rise was in April.
The market is waiting for a final decision from the central government on whether to further tighten curbs on the property market. Eight “inspection teams” fanned out to top cities in late July to check whether local governments were enforcing property curbs.
“The government’s concern is that the property market will rebound past the level they want. But we haven’t seen the turn in price and transactions feed into construction activity, and the government needs that to feed into the construction activity if economic growth is to recover,” said Alistair Thornton, an economist with IHS Global Insight in Beijing.
The average home price in China’s 100 major cities edged up in July for the second straight month, a survey from China Real Estate Index System (CREIS) showed earlier this month.
China Vanke Co Ltd, the country’s largest real estate developer by sales, saw its July sales rise 14 per cent from the same period a year earlier to 10.39 billion yuan ($1.63 billion).
Construction starts fell 9.8 per cent in the first seven months of 2012, deepening a decline of 7.1 per cent in the first half, the NBS data showed.
Land bought by developers fell 24.3 per cent in the first seven months from a year earlier, again deepening a drop of 19.9 in the first half.
Other data today showed annual growth in China’s factory output slowed to its weakest in more than three years in July, missing market forecasts and increasing expectations that Beijing will take further policy steps to support an economy that has been sliding for six straight quarters. – Reuters