* China Jan-Sept property investment +5.8 pct y/y
* Sept only +7.8 pct y/y - Reuters calculations
* Jan-Sept sales +26.9 pct by floor area, Sept only +34 pct
* New construction growth slows significantly from August
(Adds analyst comments, quotes NBS official )
BEIJING, Oct 19 September's investment in
Chinese real estate showed its strongest growth since May as
booming construction, sales and prices contributed handsomely to
third quarter economic expansion of 6.7 percent - offsetting
stubbornly weak exports.
Property investment rose 7.8 percent in September from a
year earlier, compared with 6.2 percent in August, according to
Reuters calculations based on data issued by the National Bureau
of Statistics (NBS) on Wednesday.
But real estate developers may have become more cautious of
taking on new developments, fearing a fall in sales momentum if
the government imposes more tightening measures to prevent a
property bubble, analysts say.
New construction starts fell 19.4 percent in September
month, suggesting sentiment among builders may have already
started to cool.
"Today's data showed developers are relatively cautious on
new projects, because land has become rather expensive now, and
such a strong sales momentum might not be sustainable moving
forward," said Wang Tao, chief China economist at UBS.
More than 20 cities have adopted restrictive measures,
including higher mortgage downpayments and an immediate ban on
second-home purchases, to prevent speculative buying that could
further fuel price bubbles.
Most of these measures, however, were implemented during
China's national holidays over the first week of October, and
were yet to be reflected in Wednesday's NBS data.
Wang said that the sharp decline in new construction starts
in September was also due to high base number from the previous
year, noting that the number is highly volatile.
"The developers might have quickened the pace for
investment, to finish the existing projects since sales
performance was so great," Wang said.
For the first nine months of the year, property investment
grew 5.8 percent, accelerating from 5.4 percent in the first
In September alone, the area of property sold grew a vibrant
34 percent, Reuters calculations show, compared with 19.8
percent in August.
Property sales by floor area in the first nine months grew
26.9 percent, up from 25.5 percent growth in January-August.
But overheating in some parts of the property market over
recent months has become a serious concern for policymakers.
Housing prices in tier-1 and some tier-2 Chinese cities
soared 27 percent on-year in July and 28 percent in August
marking the second bout of housing fever this year, according to
a UBS report.
Some analysts noted that the sharp price rises reflected a
rush to buy in anticipation of new ownership restrictions being
Yet with policies set to curb prices and demand being
withdrawn earlier, analysts expect sales momentum to gradually
decelerate, while relatively high investment growth could be
expected to last until year-end.
"I think property investment will be able to support the
economy in the next two months, but after that the supportive
effects will be smaller," Wang said, adding that the government
would increasingly rely on infrastructure investment next year.
Sheng Laiyun, a spokesman for the National Bureau of
Statistics, said the property sector contributed 8 percent to
China's GDP growth in the first nine months of 2016, which came
in as expected at 6.7 percent.
He said recent property market tightening measures would not
have a "very big impact" on economic growth.
Although growth in inventories has been on a downward trend
as speculative buying spilled over from bigger cities to
lesser-known, lower-level centres, huge inventories of unsold
homes continue to weigh on prices in many smaller centres.
Growth in inventory floor area last month was 4.7 percent
higher than a year earlier, compared to 6.9 percent in August.
(Reporting by Yawen Chen and Kevin Yao; Editing by Eric Meijer)