China first quarter property investment growth weakens to near six-year low, sales drop narrows
HONG KONG (Reuters) - Growth in China's real estate
investment in the first quarter slowed to the lowest rate since 2009 as
developers focused on clearing excess inventory, while a series of government
support measures braked the rate of decline in property sales.
Property
investment growth eased to 8.5 percent in January to March from a year earlier,
the National Bureau of Statistics (NBS) reported on Wednesday, dropping from
10.4 percent in the first two months of 2015. The 2009 low was 8.3 percent.
Property sales volume dropped 9.2 percent from the
year-earlier period, narrowing from a 16.3 percent decline in January to
February.
Growth in China's
gross domestic product, of which real estate comprises about 15 percent, slowed
to a six-year low of 7.0 percent in the first quarter as demand stayed weak.
GDP data out on
Wednesday met analyst forecasts, but built up expectations that authorities
will roll out more policy stimulus to avert a sharper slowdown.
China's stock
indexes, which have been on a historic rally since Beijing began easing
monetary policy in November, eased in afternoon trade after the data release,
with the CSI300 index <.CSI300> down 0.8 percent. The CSI300 real estate
sub-index <.CSI300REI>, however, dipped over 2 percent.
"The easing
policies will be of limited help to property investment, which has a larger
impact on the real economy than housing sales. It'll be difficult for property
investment to see a rise in growth," said Nomura chief China economist
Zhao Yang. "That's why the government is focusing on boosting
infrastructure."
Zhao said the
government's relaxation of its house-buying regulations in late March were
stimulatory to sales in the short term, and forecast some slight growth for the
second half of the year.
The real estate downturn
remains a key risk to China's 7 percent economic growth target, crimping demand
in 40 related economic sectors ranging from steel to cement to furniture.
China Vanke
<2202.HK> <000002.SZ>, the country's largest property developer,
last month warned of a large inventory of unsold property, and state-backed
China Resources Land <1109.HK> said the sector will continue to focus on
clearing inventory this year.
But the rate of
decline in Chinese home prices slowed in March from February, two private surveys
showed, adding to hopes the housing market is stabilizing as Beijing enacts
policies to bolster a faltering economy.