China Property Sector Slowing Down

Source : The Business Times, August 19, 2008

(BEIJING) Property investment has slowed in China since mid-year, both in value and land area, amid tighter credit and buyers' uncertainty, official statistics released yesterday show.

The National Bureau of Statistics said that between January and July, investment in real estate development totalled 1.588 trillion yuan (S$326.7 billion), up 30.9 per cent year-on-year.

However, the rate of increase was 2.6 percentage points less than the rate in the first half.

Spending on residential projects was 1.15 trillion yuan, up 33.7 per cent but 2.8 percentage points lower than in the first half alone.

The total included 45.9 billion yuan in low-income housing, up 25.2 per cent but six percentage points less than in the first half.

In the first seven months, 148 million square meters of land went under development, up 4.2 per cent year-on-year. However, the growth rate was 5.7 percentage points lower than in the first half.

About 2.23 billion sq m of housing were under construction during the January-July period, up 22.5 per cent. Yet again, the growth rate slowed from the first half, by 1.6 percentage points.

Previously, the central bank had reported that first-half lending to real estate developers and home buyers was 398.84 billion yuan, down 170.66 billion yuan from a year earlier.

Since the end of last September, when China tightened credit for those buying more than one apartment, demand has ebbed.

Additionally, price falls in some cities have made prospective buyers wary.

Developers sold about 260 million sq m of housing in the first six months with a value of one trillion yuan, representing decreases of 7.2 per cent and 3 per cent year-on-year, respectively.

The National Bureau of Statistics also said that between January and July, 129 million sq m of commercial property was vacant, up 6.1 per cent. This was one of the few cases where the growth rate rose from the first half; in this case, by 3.9 percentage points. -- Xinhua