USEUROPEAFRICAASIA 中文双语Français
Business
Home / Business / Industries

Real estate investment likely to slow down

By Li Xiang | China Daily | Updated: 2017-04-18 09:23

Real estate investment likely to slow down

Potential property buyers visit the spring home fair in Beijing on Friday. [Photo by Kuang Linhua/China Daily]

The growth of real estate investment in China is likely to decelerate in coming quarters despite robust growth in the first quarter, as policy tightening may eventually weigh on property sales and investment activities, analysts said on Monday.

Property investment rose 9.1 percent year-on-year in the first quarter of the year, the fastest growth rate since March 2015, data from the National Bureau of Statistics showed.

The robust growth showed that the property sector remains a crucial driver of the Chinese economy.

But officials and analysts said that strength in the property sector may moderate in the coming months, as rounds of stringent cooling measures by the government to rein in surging housing prices will gradually take effect.

NBS spokesman Mao Shengyong said that the effect of the policy tightening on the property market and the overall economy will emerge in April and later as the latest round of cooling measures were issued after March 17.

"It is very likely that transaction volumes by floor space and the growth rate will decelerate in the coming months, which will affect the investment enthusiasm of property developers," Mao said at a news conference.

Growth of property sales measured by floor space rose by 19.5 percent from a year earlier in the first quarter, down from 25.1 percent in the first two months of the year.

Zhao Yang, chief China economist at Nomura Securities Co, said that the strength in property investment will unlikely be sustainable and the sector is expected to cool in coming quarters given rounds of policy tightening on the property sector.

The price surge has prompted at least 50 cities to adopt stricter measures since mid-March to cool the property market and to curb speculation. The Beijing municipal government has raised down payment for second homes with space exceeding 140 square meters to as much as 80 percent.

Zhu Haibin, chief China economist at JPMorgan Chase & Co, said that the outlook for the housing market is a major uncertainty for the Chinese economy this year, although extreme fluctuations in the sector are unlikely.

"We do not expect extreme movements (either a boom or a bust scenario is very unlikely this year), given the current demand-supply conditions in the housing market and the policy incentive to stabilize rather than crack down on the housing market," Zhu said in a research note.

But given the importance of the housing market, even modest upside or downside risks to the housing market could affect the trajectory of the growth forecasts, he added.

Most Viewed in 24 Hours
BACK TO THE TOP
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US