PROPERTY sales in China dropped for the first time in more than two-and-half years in September and housing starts slowed sharply, reinforcing expectations that robust growth in the world’s second-largest economy is starting to cool.

Real estate, which directly affects 40 other business sectors in China, is a crucial driver for the economy but also poses a major risk as the government looks to tame soaring home prices without triggering a crash or a sharp drop in construction activity.

Property sales by floor area fell 1.5 percent in September from a year earlier, compared with a 4.3 percent increase in August and a 34 percent jump in September 2016, according to official data released Thursday.

That marked the first annual decline since March 2015.

“The negative September sale number shows that, unequivocally, the property boom has peaked,” said Rosealea Yao, an analyst at Gavekal Dragonomics.

“We have seen some big rebounds at the end of the first and second quarter, but given how fast the sale numbers are declining, we expect no big rebound this time.”

New construction starts by floor area, a volatile but telling indicator of developers’ confidence, rose just 1.4 percent in September year on year, slowing from a 5.3 percent increase in August.

The softening in property activity appeared to drag on broader growth in the third quarter, as many economists had predicted. China’s economy grew 6.8 percent in the third quarter from a year earlier, easing from 6.9 percent in the second quarter.

Property investment did rise 9.2 percent in September, picking up pace from an expansion of 7.8 percent in August, but analysts noted such investment usually lags sales trends by up to six months. (SD-Agencies)