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Real estate investment surges, prices rise

By Zheng Yangpeng (China Daily)

Updated: 2016-03-14 08:05:09


Talk about new growth engines may be all the rage, but property development remains a tried-and-true growth booster.

Real estate investments, representing nearly 20 percent of the nation's total investment in fixed assets, has accelerated for the first time since the beginning of 2015, according to the National Bureau of Statistics.

New housing starts posted a significant surge: from a 14 percent contraction in December to a 13.7 percent rise in the first two months of the new year. Property sales, in terms of floor space, rose 28.2 percent, while in terms of value, they surged even more - 43.6 percent, the bureau said.

That suggests a substantial price increase. The January-February growth numbers, however, were exaggerated by an extremely low comparison base in the same period last year.

For example, property sales, which were reported at 112.35 million square meters, trailed behind last year's two-month average of 214 million sq m, and were just 7 percent higher than 2013 and 2014's first two months.

Still, for the first time in the past year, property sales, investments and land sales all ended their downward trajectory, something developers and local governments cheered.

Buoyed by a significant housing price surge in first-tier and a few second-tier cities in the past month, property sales are expected to accelerate in the following months, which would in turn raise developers' appetite for more construction and the economy's overall demand.

However, housing industry specialists noted, the recovery was still uneven.

The number of unsold homes is still on the rise with 70 percent of them in small cities, overshadowing the hope for a sustained, industrywide recovery.