China’s yearly real estate investment and sales growth accelerated in July, as revealed in official data, even as the government increased efforts to regulate the sector.
The optimistic growth in one of China’s key sectors provides a boost to its sluggish economy at a crossroads where global investors are concerned about a recession relapse in the United States and the escalating Euro-zone sovereign debt crisis.
The National Bureau of Statistics (NBS) noted that property investment rose 33.6 percent for the January-July period of this year compared to the same period in 2010, up from the annual average of 32.9 percent for the first half.
Property sales advanced 13.6 percent in the January-July period from a year ago and grew 26.1 percent value-wise, according to the NBS website.
These are improved figures, based on the annual increase of 12.9 percent and 24.1 percent for property sales and growth respectively in the first six months of 2010.
Analysts observed that the country’s drive to construct more affordable homes and solid pre-sales a year ago has supported the rapid increase in investment.
Chinese developers, including Vanke and Poly, started cutting prices to stimulate sales as the regulatory policy outlook began to look grim.
Analysts believe that more developers will likely follow suit in the coming months, as they sell out record high inventories, such as those seen in Shanghai and Beijing.
Chinese banks are likewise slashing their involvement in the real estate sector, despite the banking regulator’s statement that the sector can survive a 50 percent reduction in home prices.
Nonetheless, price cuts have yet to be seen and home prices are slowly rising.
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