UPDATE 1-China property investment, sales growth quickens in July

Tue Aug 9, 2011 5:50am EDT

Related Topics

* Jan-July real estate investment up 33.6 pct y/y vs 32.9 pct in H1

* Property sales up 13.6 pct in first 7 mths vs 12.9 pct in H1 (Add details, background)

BEIJING Aug 9 (Reuters) - China's annual real estate investment and sales growth quickened in July, official data showed on Tuesday, even as Beijing intensified efforts to cool the red-hot sector.

Buoyant growth in one of the country's key sectors gives the slowing Chinese economy a shot in the arm at a time when global investors are worried about a new recession in the United States amid an escalating sovereign debt crisis in Europe.

Property investment in China grew 33.6 percent in the first seven months of this year from the same period a year earlier, up from an annual pace of 32.9 percent in the first half, the National Bureau of Statistics said.

Meanwhile, property sales rose 13.6 percent in the January-July period from a year earlier in terms of floor space and gained 26.1 percent in terms of value, the agency said in a statement on its website, www.stats.gov.cn.

They compared with an annual increase of 12.9 percent and 24.1 percent, respectively, in the first six months.

The NBS did not provide separate data for July alone, but these pairs of figures showed growth in both China's real estate investment and sales turned stronger last month.

That came after Beijing announced fresh steps in mid-July to contain housing inflation and speculation, aiming to take the heavy-handed purchase restrictions to smaller cities where home prices were rising faster than in big cities.

Analysts said China's increased push to build more affordable housing and strong pre-sales last year had sustained rapid increase in investment.

Chinese developers, including Vanke and Poly , have started to cut prices slightly in order to boost sales as the policy outlook turned against them.

Analysts said they expected more developers to follow suit in the next few months, as they have to speed up efforts to sell down record high inventories.

Big cities such as Beijing and Shanghai have unsold residential property of more than 10 times their current monthly sales amount.

Chinese banks are also cutting their exposure to the real estate sector, although the banking regulator has repeatedly said it is confident the sector can withstand home prices falling as much as 50 percent.

However, widespread price cuts have not been seen, and home prices in most cities are still rising, albeit at a slower pace.

The NBS is scheduled to announce home price data for 70 major cities next Thursday. (Reporting by Langi Chiang and Koh Gui Qing; Editing by Jacqueline Wong)

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