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China property investment rises 3% in Jan-Feb

China property investment rises 3% in Jan-Feb

BEIJING: Investment in China’s property sector rose 3 percent year on year in the first two months of 2016, making notable improvement, official data showed here the other day.

The growth rate was higher than the 1-percent increase for the entirety of 2015. It marks an end to a continuous deceleration over the past two years in the growth of China’s property investment.

The property sector has been a significant supporting force for China’s economic growth.

A prolonged weakness in the property sector and growth deceleration in the investment is believed to be a key reason behind China’s current weakness in demand and the main downside risk to the Chinese economy.

According to the National Bureau of Statistics (NBS), investment in residential housing, which accounts for about two-thirds of total property investment, rose 1.8 percent in the first two months of 2016.

New housing construction soared 13.7 percent year on year in the first two months, compared with the 14-percent decrease seen in 2015. Construction of new residential houses, in terms of floor space, gained 9.7 percent, compared with a 14.6-percent decline last year.

On the same basis, sales of residential property jumped 28.2 percent in the first two months, much higher than the 6.5-percent gain in 2015, data showed.

In revenue terms, sales of residential property soared 43.6 percent, compared with the 14.4-percent gain seen in 2015.

NBS figures also showed the land area purchased by property developers dropped 19.4 percent, much better than the 31.7-percent decline recorded in 2015.

However, funding growth for property developers dropped by 1 percent year on year in the first two months, compared with the 2.6-percent gain in 2015.

China’s property sector has shown signs of improvement in the last two months, as home prices in metropolises such as Beijing, Shenzhen and Shanghai shot up.

But markets in smaller cities remain subdued due to excess stock, which the government has aimed to destock, but with little success so far.

Overall, the Chinese property market remained weak owing to weak demand and a supply glut. There were 719 million square meters of finished but unsold properties across China at the end of 2015, up 22.2 million square meters from the end of November, NBS data showed.