BEIJING (Reuters) - Annual investment growth in China’s real estate sector slowed to five-year low in December, even as year-end sales improved, helping to hold 2014 economic growth to the lowest in 24 years.
Property investment, a main driver of the economy, rose 10.5 percent in 2014 from a year earlier, the National Bureau of Statistics(NBS) said on Tuesday, the slowest pace since the January-July period of 2009.
That compared with an annual rise of 11.9 percent in the first 11 months of 2014 and 19.8 percent growth through 2013.
The cooling real estate market helped hold annual growth in the world’s second-largest economy to 7.4 percent in 2014, its weakest pace in 24 years, according to gross domestic product data released on Tuesday.
Economists believe the cooling housing market will continue to pose one of main risks to China’s economy in 2015, even as Beijing works to stimulate overall growth.
“The greatest risk remains the adjustment in the property sector,” said Tao Wang, China economist at UBS in Hong Kong.
“We think (property) sales may improve somewhat, but I don’t see that in housing in terms of construction.”
Construction activity also declined in December, showing developers have slowed their rate of expansion in the face of a pessimistic outlook for 2015.
Newly-started property construction fell 10.7 percent in 2014 from a year earlier, quickening from annual drop of 9 percent in January-November.
The weak investment figures follow data on Sunday showing China’s new home prices in December fell an average 4.3 percent year-on-year in 68 of the 70 major cities the NBS monitors.
China’s real estate market has been plagued by falling prices and high inventories in recent months, crimping demand in 40 related economic sectors ranging from steel to cement to furniture.
Still, while the housing market is expected to remain weak well into this year as persistent oversupply maintains pressure on the market, sales volume data could suggest the worst may be over.
Property sales hit 189.3 million square meters in December, the highest level of 2014, Reuters calculations from NBS data showed, though they were still down 4.1 percent from the same period a year ago.
The NBS data also showed mortgage loans to home buyers dropped 2.6 percent in 2014, easing from the drop of 4.2 percent in January-November, as banks quickened their mortgage approvals and gave some buyers preferential rates.
Reporting By Xiaoyi Shao and Kevin Yao; Editing by Eric Meijer