GROWTH in China’s real estate investment in October cooled to a 10-month low and home sales fell again as developers held back expansion plans in the face of broadly softening economic conditions. The property market — a key driver of economic growth — has been cooling in recent months, as land auctions tumbled and various tightening measures kept overall home sales in check. Property investment, which mainly focuses on residential but also includes commercial and office space, grew 7.7 percent in October from a year earlier, slowing from an 8.9-percent expansion in September, showed calculations from National Bureau of Statistics (NBS) data out yesterday. The property market has been relatively resilient in the face of a raft of curbs, as many investors exploited regulatory loopholes and turned to smaller and less-restricted cities. Some speculators are also betting that local governments, which rely on revenue from real estate, will be reluctant to overly tighten the screws in the sector. Property sales by floor area were down 3.1 percent in October from a year earlier, compared with a 3.6 percent fall in September. In year-to-date terms, property sales rose 2.2 percent in the first 10 months, official data showed. Sentiment started to turn cautious after the second half of 2018 due to a surge in failed land auctions, especially in bigger cities, as developers struggled with thinning margins amid the prolonged curbs and softening economic conditions. Land transactions by area fell 22 percent in 40 major Chinese cities in October from the preceding month, while the land transaction premium rate was two percentage points lower than September, according to data from CRIC, a private research firm. As economic headwinds rise, homebuyers are staying on the sidelines. New construction starts measured by floor area rose 14.7 percent in October from a year earlier, compared with a 20.3-percent gain in September, calculations showed. China’s real estate developers raised 13.56 trillion yuan (US$1.95 trillion) in the first 10 months, up 7.7 percent from the same period a year earlier, the NBS said. The growth rate compared with a 7.8-percent increase in January-September period. Official data for September showed smaller cities helped quicken China’s new home price growth.(SD-Agencies) |