THE country posted its fastest property investment growth in three years in the first quarter of the year, driven by a surge in land values and as developers grew more confident about the policy outlook. However, sales slowed as existing curbs hit transactions.

Property investment grew 10.4 percent in the January-March period from the same period a year earlier, compared with a 9.9-percent rise in the first two months, data from the National Bureau of Statistics (NBS) showed yesterday. This matched the year-to-date growth seen in the January-February 2015 period, which was the fastest since the first quarter of 2014.

Analysts say a significant rise in land prices, as well as local governments rushing to frontload public housing projects could have contributed to the boost in the headline figure.

“Land prices have grown sharply since last year, contributing heavily to the total investment value,” said Yang Yewei, an analyst at Southwest Securities.

Yang said that China’s efforts to get rid of shanty towns — offering money and resettlement to squatters — sped up notably in the first quarter of the year, also resulting in higher investment values.

Total land transaction values rose 20.3 percent in the first three months of the year from a year earlier, the data showed. Over the same period, total land purchased only rose 0.5 percent.

Other analysts note developers are incentivized to restock as inventories fall and market sentiment in smaller cities remains strong. Official data shows the amount of unsold completed homes has fallen 16.7 percent by end-march from a year earlier.

For March alone, property investment grew a robust 10.8 percent from same period last year, according to media calculations based on official data.

New construction starts measured by floor area, a gauge of developers’ confidence, were up 9.7 percent year on year in the first quarter, after slowing to 2.9 percent in the January-February period, NBS data showed.

Property investment is estimated to grow 5 percent in the full year of 2018 as tight supply and government policies that promote real estate in smaller cities are seen keeping the market relatively buoyant despite other cooling measures, a recent poll showed.(SD-Agencies)