China April property investment quickens, sales slow

BEIJING Mon May 13, 2013 3:12am EDT

Construction workers stand on a platform as it hangs on the front of a new apartment block in Beijing March 17, 2010. REUTERS/David Gray

Construction workers stand on a platform as it hangs on the front of a new apartment block in Beijing March 17, 2010.

Credit: Reuters/David Gray

BEIJING (Reuters) - Growth in real estate investment in China quickened in the first four months as developers saw improved liquidity conditions, though property sales slowed slightly due to continuing government curbs.

Real estate investment, which affects more than 40 other sectors from cement and steel to furniture, rose 21.1 percent in the first four months of 2013 from a year earlier, quickening from an annual increase of 20.2 in the first quarter, the National Bureau of Statistics said on Monday.

Revenues from property sales in January-April eased slightly to 59.8 percent from a surge of 61.3 percent in the January to March period, the NBS said.

"The improved property investment is mainly bolstered by relatively strong home sales and ample liquidity of developers," said Luo Yu, a property analyst at private research house CEBM in Shanghai.

China's home prices have seen an upswing since around the middle of last year when the central bank began to expand monetary easing as part of Beijing's growth-supporting policies.

China's credit boom in the first quarter could suggest new money is being channeled into the property sector, adding upward pressure on home prices.

Average home prices in China's 100 biggest cities climbed 1 percent in April from March, moderating from March's month-on-month gain of 1.1 percent, a private survey showed.

However, recent government cooling measures introduced in response to concerns over a property bubble have shown initial results, as home transactions slumped in major cities and month-on-month gains in home prices eased slightly in April.

China should gradually rely on market forces, including taxation, to control the housing market while taking more effective measures to ensure strict restrictions are enforced by local governments, said the official People's Daily in a commentary on Monday.

Relatively good sales and easier credit have also enabled developers to quicken their construction activity.

Construction starts rose 1.9 percent in the first four months of 2013, improving from a decline of 2.7 percent in the first quarter, the NBS data showed.

Total land area bought by developers fell 8.6 percent in the first four months from a year earlier, easing from a drop of 22 percent in the first quarter.

(Reporting By Xiaoyi Shao and Jonathan Standing; Editing by Alex Richardson)

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